big

Question 1

business cycle

Answer 1

periodic fluctuations in economic activity, measured by changes in real GDP growth rate

Question 2

gross domestic product

Answer 2

market value of aggregate output produced within a country during a given time period

Question 3

gross national income

Answer 3

value of all final g&s produced by FoP of the country’s residents, regardless of location

Question 4

real

Answer 4

GDP measured in terms of prices of a base year and has eliminated the influence of changes in price

Question 5

nominal

Answer 5

GDP measured in terms of current prices and does not account for changes in price

Question 6

per capita

Answer 6

correspond to each person in the population on average

Question 7

living standard

Answer 7

degree of wealth, material comfort & necessities available to a person

Question 8

welfare

Answer 8

the physical and mental happiness of a person
refers to a range of gov programmes that provide financial or other aid to individuals or groups who cannot support themselves

Question 9

aggregate demand

Answer 9

total quantity of real GDP that all buyers in an economy are willing & able to buy at different general P levels over a particular time period, ceteris paribus

Question 10

consumer confidence

Answer 10

how optimistic consumers are about their future income and the future of the econ

Question 11

business confidence

Answer 11

how optimistic firms are on their future sales and econ activities

Question 12

aggregate supply

Answer 12

total quantity of real GDP produced in an economy at different general price levels over a time period, ceteris paribus

Question 13

short run aggregate supply

Answer 13

relationship between gen P levels and Q of real outputs produced by firms when resource P no change

Question 14

long run aggregate supply

Answer 14

relationship between gen P levels and Q of real outputs produced by firms when resource P is flexible & changes along with changes in gen P levels

Question 15

full employment output

Answer 15

level of output measured by real GDP when all productive resources are fully and efficiently used
unemployment is at NRU

Question 16

inflation

Answer 16

sustained increase in general price level

Question 17

inflationary gap

Answer 17

real GDP&raquo_space;> Yp
excess AD → unemployment «< NRU
firms require more labour → excess demand of labour → over-utilised

Question 18

deflation

Answer 18

sustained decrease in general price level

Question 19

deflationary gap

Answer 19

real GDP «< Yp
insufficient AD → unemployment&raquo_space;> NRU
firms require less labour → excess supply of labour → under-utilised

Question 20

unemployment

Answer 20

people of working age who are willing and able to work and are actively seeking work but are without work at the current wage rate

Question 21

frictional unemployment

Answer 21

occurs when workers are moving in between jobs

Question 22

seasonal unemployment

Answer 22

occurs when workers are unemployed due to seasonal fall in labour demand in the industry

Question 23

structural unemployment

Answer 23

mismatch between the worker’s skills supplied & jobs available

Question 24

cyclical unemployment

Answer 24

occurs when the economy produces at an output level that is lower than Yp at deflationary rate

Question 25

natural rate of unemployment

Answer 25

frictional unemployment + structural unemployment + seasonal unemployment

Question 26

consumer price index

Answer 26

measure of cost of g&s purchased by the typical household in an economy

Question 27

weighted price index

Answer 27

an approach to calculating the change in the price level by giving a weight to each item according to its importance in the consumers' budgets

Question 28

disinflation

Answer 28

a fall in the rate of inflation

Question 29

demand-pull inflation

Answer 29

sustained increase in general price level caused by an increase in AD

Question 30

cost-push inflation

Answer 30

sustained increase in general price level caused by an increase in CoP resulting in a decrease in SRAS

Question 31

bad deflation

Answer 31

deflation caused by decrease in AD

Question 32

good deflation

Answer 32

deflation caused by increasing in SRAS

Question 33

economic growth

Answer 33

increase in real GDP of an economy over a time period

Question 34

actual economic growth

Answer 34

previous unemployed/underemployed FoP are brought into production

Question 35

potential economic growth

Answer 35

increase in quantity & quality of FoP that increases the maximum production capacity

Question 36

productivity

Answer 36

the efficiency with which a country combines capital and labour to produce more with the same level of factor inputs

Question 37

interest rate

Answer 37

rate at which borrowers are charged or lenders paid for their loan

Question 38

monetary policy

Answer 38

carried out by the central bank by changing the interest rate to adjust AD to maintain low unemployment and price stability

Question 39

fiscal policy

Answer 39

manipulations by the gov of its own tax & expenditure to adjust AD to maintain low unemployment and price stability

Question 40

expansionary

Answer 40

increase in AD and real GDP

Question 41

contractionary

Answer 41

decrease in AD and real GDP

Question 42

supply-side policy

Answer 42

aim at positively affecting production side of econ by improving institutional framework and capacity to produce

Question 43

market-based supply side policy

Answer 43

make institutional changes such that the market operates more freely and is more competitive with less government intervention

Question 44

privatisation

Answer 44

a type of supply-side policy where the government sells public assets to the private sector

Question 45

deregulation

Answer 45

a type of supply-side policy where the government reduces the number or type of regulations governing the behaviour of firms

Question 46

labour market reforms

Answer 46

make the markets more responsive to supply and demand so that the level of employment will increase and productivity will rise

Question 47

labour union

Answer 47

an organisation of workers whose goals include the improvement of working conditions and payments to workers work on behalf of workers through negotiations (collective bargaining) with management

Question 48

interventionist supply side policy

Answer 48

government take an active role in increasing productive capacity