chapter 21 - possible macroeconomic objectives Flashcards
1
Q
economic growth
A
increase in the value of total output ( what is produced (visible) and services e.g. tourism (invisible))
2
Q
aggregate demand equation
A
C + I + G + ( X - M )
3
Q
5 things the macroeconomics is concerned with…
A
- the total level of spending in the economy
- levels of employment and unemployment
- the total investment made by businesses and government
- the general level of price inflation
- the rate of exchange and interest rates
4
Q
why is economic growth important for businesses
A
- more demand
- more sales and potential profits
- EOS - effective demand
- attract investors
- invest in R and D
- growth
- improved confidence
5
Q
why is economic growth is important for countries
A
- better / a rise in living standards
- lower unemployment
- positive multiplier
- increase tax revenues
- improved business confidence
- technological innovation
6
Q
how can GDP be measured
A
- the percentage increase in a country’s real gross domestic product over a period of time
- the % annual increase in national output
7
Q
potential growth
A
- the long run expansion of an economy’s productive potential
- the increase in the capacity of the economy to produce
- caused by an increase in aggregate supply
- potential output is that which could be produced if there was full employment of all resources
8
Q
measures of economic growth
A
- GDP
- GDP per capita
- GNP
- GNP per capita
- GNI
- GNI per capita
9
Q
gross national income
A
total value of domestic and foreign output - GDP + incomes earned by foreign residents minus income earned by non - residents
10
Q
real value
A
occurs after inflation has been accounted for
11
Q
nominal value
A
occurs before inflation is accounted for
12
Q
8 factors affecting economic growth
A
- economic policies
- shock and uncertainty
- investment
- globalisation
- regulation and law
- synergy
- external costs
- competition
