Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

KEY TERMS

Question

National income and product accounts (national accounts)
Consumer spending
Stock
Bond
Government transfers
Disposable income
Private savings
Financial markets
Government borrowing
Government purchases of goods and services
Exports
Imports
Inventories
Investment spending
Final goods and services
Intermediate goods and services
Gross domestic product (GDP)
Aggregate spending
Value added
Net exports
Aggregate output
Real GDP
Nominal GDP
Chained dollars
GDP per capita
Aggregate price level
Market basket
Price index
Inflation rate
Consumer price index (CPI)
Producer price index (PPI)
GDP deflator
a measure of prices; calculated by surveying market prices for a market basket intended to represent the consumption of a typical urban American family of four. The CPI is the most commonly used measure of prices in the United States.
spending on productive physical capital—such as machinery and construction of buildings—and on changes to inventories.
a single number that represents the overall price level for final goods and services in the economy.
the total quantity of final goods and services the economy produces for a given time period, usually a year. Real GDP is the numerical measure of aggregate output typically used by economists.
the difference between the value of exports and the value of imports. A positive value for net exports indicates that a country is a net exporter of goods and services; a negative value indicates that a country is a net importer of goods and services.
the banking, stock, and bond markets, which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing.
household spending on goods and services from domestic and foreign firms.
payments by the government to individuals for which no good or service is provided in return.
the annual percent change in a price index—typically the consumer price index. The inflation rate is positive when the aggregate price level is rising (inflation) and negative when the aggregate price level is falling (deflation).
total purchases by federal, state, and local governments on goods and services.
a measure of the cost of a typical basket of goods and services purchased by producers. Because these commodity prices respond quickly to changes in demand, the PPI is often regarded as a leading indicator of changes in the inflation rate.
goods and services purchased from other countries.
GDP divided by the size of the population; equivalent to the average GDP per person.
the value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced.
disposable income minus consumer spending; disposable income that is not spent on consumption but rather goes into financial markets.
income plus government transfers minus taxes; the total amount of household income available to spend on consumption and to save.
goods and services sold to other countries.
the total value of all final goods and services produced in the economy during a given period, usually a year.
the total amount of funds borrowed by federal, state, and local governments in financial markets to buy goods and services.
goods and services sold to the final, or end, user.
stocks of goods and raw materials held to facilitate business operations.
a legal document based on borrowing in the form of an IOU that pays interest.
the total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year.
(of a producer) the value of a producer’s sales minus the value of its purchases of intermediate goods and services.
a share in the ownership of a company held by a shareholder.
goods and services—bought from one firm by another firm—that are inputs for production of final goods and services.
a measure of the cost of purchasing a given market basket in a given year, where that cost is normalized so that it is equal to 100 in the selected base year; a measure of overall price level.
method of calculating and keeping track of consumer spending, sales of producers, business investment spending, government purchases, and a variety of other flows of money between different sectors of the economy.
a price measure for a given year that is equal to 100 times the ratio of nominal GDP to real GDP in that year.
the total flow of funds into markets for domestically produced final goods and services; the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports.
a hypothetical consumption bundle of consumer purchases of goods and services, used to measure changes in overall price level.
method of calculating real GDP that splits the difference between growth rates calculated using early base years and the growth rate calculated using a late base year.