GDP Review. Gross Domestic Product (GDP). The Gross Domestic Product is the dollar value of all final goods and services produced within a country’s borders in a given year. In order for a good to be included in a nation’s GDP, it must be made in that country.
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Economists estimate the amount spent on four categories of goods and services
Consumer Goods and Services
Business goods and services
Government goods and services
Net exports or imports of goods and services
Add together all expenditures=GDP
expansion followed by a period of contraction.
Expansion: a period of economic growth
Peak: the height of the expansion
Contraction: a period of economic decline
Trough: the lowest point of the contraction
Occurs when people take time to find a job
People might change jobs, or get laid off, or need time to find the right job
In a large economy many people fill into this category
Occurs when industries slow or shut down or make seasonal shifts in their production
Economists expect to see seasonal unemployment throughout the year
Policymakers do not take steps to prevent this kind of unemployment
Occurs during downturns in the economy and changes during upturns
Can severely strain the economy
Underemployed- working in a job that a person is overqualified, or part time
Demand Pull Theory- inflation occurs when demand for goods and services exceeds existing supplies
Poverty Threshold-The level below which income is insufficient to support a family or household