What Is Macroeconomics? Flashcards

1
Q

Macroeconomics definition

A

The study of the whole economy at the aggregate level

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2
Q

The main economic objectives are…

A
  • Economic growth
  • Low inflation rates
  • Minimising unemployment
  • Stable balance of payments (imports and exports)
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3
Q

Economic growth

A

The increase in the potential level of real output the economy can produce over a period of time

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4
Q

Short run economic growth

A

Growth of real output resulting from using idle resources (such as labour) which is taking up the slack in the economy.

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5
Q

Long run economic growth

A

An increase in the potential level of real output in the economy

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6
Q

4 factors of production

A
  • Land (natural resource provided by nature)
  • Labour (mental and physical capacity of workers to produce goods and services)
  • Capital (machinery and equipment used to produce other goods)
  • Enterprise
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7
Q

Inflation

A

A continuing or persistent rise in the average price level

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8
Q

Balanced budget

A

Is when government spending equals government revenue

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9
Q

What is the economic problem?

A

Providing for peoples wants and needs in a world of scarcity

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10
Q

Scarcity

A

The condition in which wants are forever greater than the available supply of goods, time and resources

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11
Q

What is economics?

A

The study of how society chooses to allocate its scarce resources in order to satisfy unlimited wants and needs.

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12
Q

Real GDP

A

Is a measure of all the goods and services produced in an economy adjusted for prices changes or inflation

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13
Q

GDP - gross domestic product

A

Measures the quantity of goods and services produced in an economy.

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14
Q

CPI - consumer price index

A

Official measure used to calculate the rate of consumer price inflation, using a basket of common goods

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15
Q

Unemployment

A

People of the working age, willing and able to work and actively seeking work but cannot find a job.

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16
Q

Productivity

A

Refers to how much output can be produced with a given set of inputs

17
Q

Ceteris paribus

A

All other influencing factors are held constant

18
Q

Spare capacity

A

Is when an economy is not making full use of its available capacity - there are spare factors of production including land, labour and capital.

19
Q

Spare capacity

A

Is when an economy is not making full use of its available capacity - there are spare factors of production including land, labour and capital.

20
Q

Spare capacity

A

Is when an economy is not making full use of its available capacity - there are spare factors of production including land, labour and capital.