Lesson Flashcards: National Income

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Definition

Value added

The difference in the market value of goods before and after each production stage

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Definition

Saving

The part of the national income that is not spent on the consumption of goods and services

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Definition

Government spending

The expenditure incurred by the government to produce goods and services that benefit society as a whole, rather than individuals

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Definition

Investment

Expenses incurred by a firm or the private sector to obtain fixed capital in order to add to the country’s productive capacities in the future

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Definition

A firm

An organization that produces new goods and services by employing the factors of production owned by households

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Definition

Factor payments

The financial compensation received by households providing factors of production

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Definition

Net exports

The difference between the values of exported and imported goods and services

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Definition

Trade surplus

An economic measure of the balance of trade when net exports are positive (the amount by which the value of exports of goods and services exceeds the value of imports)

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Definition

Gross national income (GNI)

A measure of the total income earned by a country’s nationals within a given period (working either domestically or abroad)

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Definition

Consumer spending

The market value of final goods and services that are purchased in an economy by its consumers or by the households

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