Chapter Four: Module Summary -- Output and National Income
- Gross Domestic Product (GDP) is the money value of all final
goods and services produced in a country's borders in a given
year.
- GDP is a proxy for, but not a perfect measure of, our nation's
well-being. It does not account for quality issues nor the value
of leisure, and it counts production without regard for the reason
for the production.
- GDP per capita is GDP divided by the population. This
statistic is a good indicator of the average standard of living
in the economy.
- There are three equivalent ways to measure Gross Domestic
Product. These are the expenditure approach, the income approach,
and the value added approach.
- Gross National Product (GNP) is the money value of all final
goods and services produced by a country's residents in a given
year.
- The business cycle is the name for the cyclical behavior
of the economy's level of output.
- A recession is loosely defined as six consecutive months of
negative growth in real GDP.
- The attempt to flatten out peaks and troughs in the business cycle is called stabilization policy.
