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Gross Domestic Product; the sum of all final goods and services sold within a nation’s domestic borders; a measurement of economic activity
Resource Cost - Income Approach
Sum of the amount of resources used to produce goods and services, or sum of the income received from purchases of these resources.
Sum of all final goods and services purchased in an economy; typically referenced as Y = C + I + G + (X – M); Y (GDP), C (consumer purchases), I (investment outlays), G (net government spending), X (exports), M (imports).
The measure of change in GDP over time.
The value of an economic variable such as GDP, inflation, or prices in the current period, does not reflect changes in purchasing power (price level) over time.
The value of an economic variable such as GDP, inflation, or prices in the current period, adjusted for the change in purchasing power (price level) over time.
Interest Rate Effect
As interest rates fall, consumption increases due to the decrease in the cost of borrowing; as a result, purchases and business investment (Consumption, C, and investment, I, respectively) both increase.
The cost of a good or service; nominal prices reflect the current or prevailing price for an item; real prices adjust for purchasing power variation over time.
The value of GDP including the impact of inflation
adjusts for inflation by restating nominal GDP in reference to a base year dollar value.