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Economics Macro > Chapter 8 - Economic performance > Flashcards

Chapter 8 - Economic performance Flashcards

1
Q

ECONOMIC PERFORMANCE

A

success or failure in achieving policy objectives

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2
Q

ECONOMIC RECOVERY

A

when SR economic growth happens after a recession

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3
Q

DEMAND-SIDE

A

impact of changes in aggregate demand on the economy

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4
Q

SUPPLY-SIDE

A

changes in potential output affected by the available factors of production e.g. productivity

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5
Q

TREND GROWTH RATE

A

rate at which output can grow without inflationary pressures

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6
Q

SEASONAL FLUCTUATION

A

variation in economic activity due to a change in season

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7
Q

ECONOMIC CYCLE

A

ups and downs in economic activity over a period of 4-12 years

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8
Q

ACTUAL OUTPUT

A

level of real output in the economy in a particular year

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9
Q

TREND OUTPUT

A

what the economy is capable of producing when working at full capacity

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10
Q

POSITIVE OUTPUT GAP

A

the level of actual real output is GREATER than the trend output

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11
Q

NEGATIVE OUTPUT GAP

A

the level of actual real output is LOWER than the trend output

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12
Q

FRICTIONAL UNEMPLOYMENT (transitional unemployment)

A

short term unemployment due to workers that are in-between jobs

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13
Q

GEOGRAPHICAL IMMOBILITY OF LABOUR

A

workers are unwilling or unable to move location in search of work

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14
Q

OCCUPATIONAL IMMOBILITY OF LABOUR

A

workers are unwilling or unable to move jobs due to their skills

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15
Q

STRUCTUAL UNEMPLOYMENT

A

long term unemployment due to declining industries or growing and replacing labour with technology

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16
Q

CYCLICAL UNEMPLOYMENT

A

unemployment due to a lack of AD because of recession or depression

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17
Q

SEASONAL UNEMPLOYMENT

A

unemployment arising due to different seasons

18
Q

REAL WAGE

A

purchasing power of the nominal wage

19
Q

REAL-WAGE UNEMPLOYMENT

A

unemployment due to real wages being stuck above the equilibrium real wage

20
Q

VOLUNTARY UNEMPLOYMENT

A

when workers don’t work as they’re looking for a higher paid job

21
Q

INVOLUNTARY UNEMPLOYMENT

A

when their are no jobs available

22
Q

EQUILIBRIUM UNEMPLOYMENT

A

when the economy’s aggregate labour market is in equilibrium

23
Q

NATURAL RATE OF UNEMPLOYMENT (NRU)

A

rate of unemployment when the labour market is in equilibrium

24
Q

DEMAND-PULL INFLATION

A

rising price level caused by a shift in demand

25
Q

COST-PUSH INFLATION

A

rising price level due to an increase in costs, shown by a shift in the SRAS curve

26
Q

WAGE-COST INFLATION

A

rising price level caused by an increase in wages and salaries (movement in SRAS curve)

27
Q

IMPORT-COST INFLATION

A

rising price level due to an increase in import spending (movement in SRAS curve)

28
Q

EMERGING-MARKET COUNTRY

A

country thats progressing to becoming more economically advanced by rapid growth and industrialisation

29
Q

DISINFLATION

A

when the rate of inflation is falling

30
Q

MONETARISTS

A

economists who argue that a prior increase in the money supply is the cause of inflation

31
Q

QUANTITY THEORY OF MONEY

A

inflation is caused by an increase in the money supply

32
Q

EQUATION OF EXCHANGE

A

stock of money x velocity of circulation=price level x quantity of real output

33
Q

CURRENT ACCOUNT DEFICIT

A

exports less than imports

34
Q

CURRENT ACCOUNT SURPLUS

A

exports greater than imports

35
Q

BALANCE OF TRADE IN GOODS

A

part of the current account measuring difference in payments for exports and imports of goods

36
Q

BALANCE OF TRADE IN SERVICES

A

part of the current account measuring difference in payments for exports and imports of services

37
Q

NET INVESTMENT INCOME

A

difference between inward and outward flows in investment income

38
Q

TRANSFERS

A

payments flowing between countries in forms of aid, grants, private transfers and gifts

39
Q

EXPORT-LED GROWTH

A

economic growth due to an increase in exports in the short run, and increased national competitiveness of exporting industries in the long run

40
Q

REINDUSTIRIALISE

A

growth of industries which will replace industries which have disappeared or shrunk

41
Q

PHILLIPS CURVE

A

shows relationship between rate of inflation and rate of unemployment

42
Q

LR PHILLIPS CURVE

A

vertical line showing the NRU

Economics Macro (4 decks)

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