Intermediate goods are goods or services purchased for use as input in the production of final goods or services.
Nominal GNP is the value of final output produced in a given period, measured in the prices of that period (current prices).
To distinguish increases in the quantity of goods and services from increases in their prices, we must construct a measure of GNP that takes into account price level changes. We do so by distinguishing between real GNP and nominal GNP. Nominal GNP is the value of final output measured in that year's prices, whereas calculating real GNP, we value goods and services at constant prices.
Inflation is an increase in the average level of prices of goods and services.
Production possibilities are the alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology.
Depreciation is the consumption of capital in the production process; the wearing out of plant and equipment. This calculation leaves us with yet another measure of output; net national product (NNP). This is the amount of output we could consume without reducing our stock of capital.
The distinction between GNP and NNP is thus mirrored in a distinction between gross investment and net investment. Gross investment is positive as long as some new plants and equipment are being produced. But our stock of capital — our total collection of plant and equipment — will not grow unless gross investment exceeds depreciation. That is, the flow of new capital must exceed depreciation, or our stock of capital will decline. Whenever gross investment exceeds depreciation, net investment is positive.
Exports are goods and services sold to foreign buyers.
Imports are goods and services purchased from foreign countries.
Exercise 1. Give the English equivalents:
облік національного доходу, чистий національний продукт, валовий національний продукт, брати до уваги зміни в рівні цін, перекручувати розуміння, можливості виробництва, вимірювати в цінах, додана вартість, виробництво готових товарів та послуг, валовий національний продукт, у розрахунку на душу населення.
Exercise 2. Write an appropriate word-combination:
GNP per capita, nominal GNP, national-income accounting, intermediate goods, inflation, depreciation, imports, encounter problem.
1. ... is the measurement of aggregate economic activity, particularly national
income and its components.
2. ... is total population: average GNP.
3. When we focus on domestic market activity we ... in calculating GNP.