‫هشام الزريقي‬ CHAPTER 1 : NATIONAL INCOME ACCOUNTING

National income accounting : The measurement of aggregate economic

activity, particularly national income and its components.
Gross domestic product (GDP): The total market value of all final goods
and services produced within a nation’s borders in a given time period.
GDP per capital : Total GDP divided by total population; average GDP.
intermediate goods : Goods or services purchased for use as input in the
production of final goods or in services.
value added :The increase in the market value of a product that takes
place at each stage of the production process
nominal GDP : The value of final output produced in a given period,
measured in the prices of that period (current pricesaaa).
real GDP :The value of final output produced in a given period, adjusted
for changing prices.
base year : The year used for comparative analysis; the basis for indexing
price changes.
Inflation : An increase in the average level of prices of goods and services.
production possibilities : The alternative combinations of final goods and
services that could be produced in a given time period with all available
resources and technology.
Depreciation : The consumption of capital in the production process; the
wearing out of plant and equipment.
net domestic product (NDP): GDP less depreciation.
‫هشام الزريقي‬ CHAPTER 1 : NATIONAL INCOME ACCOUNTING

Investment : Expenditures on (production of) new plants, equipment, and

structures (capital) in a given time period, plus changes in business
inventories.
gross investment : Total investment expenditure in a given time period.
net investment : Gross investment less depreciation.
Exports : Goods and services sold to international buyers.
Imports : Goods and services purchased from international sources.
net exports :The value of exports minus the value of import.
national income (NI) : Total income earned by current factors of
production: GDP less depreciation, plus net foreign factor income.
personal income (PI) : Income received by households before payment of
personal taxes.
disposable income (DI) : After-tax income of households; personal
income less personal taxes.
Saving : That part of disposable income not spent on current
consumption; disposable income less consumption.

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