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AS Level Economics - Macro > 1.2 - Macroeconomic indicators > Flashcards

1.2 - Macroeconomic indicators Flashcards

1
Q

What is the consumer often referred to as?

A

Heart of Economics

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2
Q

What is full employment?

A

Always some unemployment, full employment minimises unemployment.

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3
Q

What is our price stability number?

A

2%

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4
Q

What is balancing the budget?

A

Budget is where we have tax and spending plans announced by the government.

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5
Q

What is a budget deficit?

A

When we spend more than we recieve.

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6
Q

What are the cons of borrowing money?

A

Pay interest, and have to pay the money back.

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7
Q

What are the four main indicators to tell us how a country is doing?

A

GDP (Real GDP per Capita)
CPI and RPI (Consumer and Retail Price Index)
Unemployment figures
Current Account of the balance of payments.

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8
Q

What indicators are known as lag indicators?

A

Unemployment, Inflation and Balance of Payments.

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9
Q

What are Lead indicators?

A

Provide information on what may happen less, consumer and business confidence.

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10
Q

What is a nominal rise?

A

Not adjusted rise.

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11
Q

How do you calculate the real increase in GDP?

A

Take into account the price rises, take away inflation.

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12
Q

What is GNI?

A

Gross National Index is another way of measuring the size of the economy.
GNI = GDP + Net property income from abroad (NPIA)

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13
Q

What is the economic cycle?

A

Where actual growth varies around trend.

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14
Q

What is a positive output gap?

A

Where actual growth is above the trend rate.

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15
Q

How do you get a positive output gap?

A

High demand for goods and services.

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16
Q

What is derived demand?

A

Demand for the workers that made those goods and services.

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17
Q

What does derived demand result in?

A

Falling unemployment.

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18
Q

Benefits of low unemployment?

A

Low benefits paid
Increase in tax paid
Increase in living standards.

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19
Q

What does RPI stand for?

A

Retail Price Index

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20
Q

What does CPI stand for?

A

Consumer Price Index

21
Q

Who uses the CPI?

A

Government

22
Q

What does the RPI include that CPI doesn’t?

A

Mortgages, debt taken on when purchasing a house.

23
Q

What is disinflation?

A

When inflation goes down (NOT PRICES).

24
Q

What is deflation?

A

When prices decrease, has to be a negative number.

25
Q

What is a weighted index?

A

Reflects what we spend our money on.

26
Q

When may RPI be a better index to use?

A

If you have a mortgage.

27
Q

What is the claimant count?

A

Number of people claiming benefits and out of work.

28
Q

What is the ILO?

A

International Labour Organisation - Survey on Unemployment.

29
Q

What is the current account?

A

A monetary value of goods and services imported and exported.

30
Q

What are transfer payments?

A

Payments from the government to benefit recipients.

31
Q

What is the hidden economy?

A

The “black” economy, illegal and under the table that the government doesn’t see.

32
Q

Why is teachers pay not a transfer payment?

A

Teachers not on benefits, earnt the money not benefits.

33
Q

How are index levels used?

A

Designed to measure magnitude of economic changes over time.

34
Q

How do you calculate index levels?

A

year of interest / base year * 100

35
Q

What are the four economic cycle processes?

A

Boom
Recession
Slump
Recovery

36
Q

What occurs during boom phase?

A

The economy is hot and most people have jobs.

It may be hard for businesses to recruit workers.

Imports will be flowing into the UK.

37
Q

What happens during recession phase?

A

Economy is slowing

People may be losing their jobs.

Businesses may be worried and will stop investing.

38
Q

What happens during the slump phase?

A

Economy is in trouble and many may be out of work.

Confidence is low and economic activity may be at a all time low.

39
Q

What happens during recovery phase?

A

Economy is starting to pick up and firms start to hire again.

Confidence grows, people start spending and the cycle begins again.

40
Q

What is the link between GDP, national income and national expenditure.

A

They are all the same, all equal each other.

41
Q

What does the letter Y symbolise in economics?

A

National Income, proxy for GDP.

42
Q

What are the factors of production?

A

Land
Labour
Capital
Resources.

43
Q

What does more saving result in?

A

Less consumption.

44
Q

What is it called when households start to save money? (circular flow)

A

Leakage.

45
Q

What is a closed economy?

A

No international trade.

46
Q

What are the three different types of leakages?

A

Tax
Imports
Savings

47
Q

What are the three different types of injections?

A

Investment
Government Spending
investments

48
Q

What is the link between deflation and buying?

A

Buyers Strike - People wait until prices decrease.

AS Level Economics - Macro (10 decks)

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