Economics Macro Main Concepts Flashcards
What are themain macro economic aims?
Econ growth
Unemployment
Inflation
Stable balance of payments on currant account
Gov debt
Inequality
Environmental Sustainability
Will there be growth or decline when there are net injections?
If there are net injections into the economy, there will be an expansion of national output.
When does SRAS occur?
Immediately after a change in price
What does SRAS show?
Planned output of the whole economy right after a change in prices
What % of GDP is accounted for in the UK be capital investment?
15-20%
What is a very good thing to mention in an essay?
The Multiplier effect
What may effect AD which isn’t in the equation?
Competitiveness in an economy leading to increased dynamic efficiency
How can you calculate the multiplier in the multiplier effect?
1/(1-MPC)
What is the main type of economic growth that can’t be sustained?
Growth through credit (borrowing)
What are the different unemployments?
Structural
Frictional
Seasonal
Cyclical (demand deficiency)
Real wage
What is Fishers Equation?
MV=PQ
How can fiscal policy effect AS?
Reduce business taxes and this could lead to increased growth and increased efficiency
What does the OBR do?
Office for Budget Responsibility
Produce 5 year forecasts including the impact or spending changes announced in the budget
They judge the governments job against its fiscal targets
They assess sustainability in the public sector in the long run
What is the main aim of SSP?
Shift LRAS to the right
Normally by increasing productive efficiency
What is free trade?
Free trade is the act of trading between nations without protectionist barriers, such as tariffs, quotas or regulations.
