chapter 1 Flashcards
(11 cards)
goal of strong and sustainable growth
a method of expanding the economys production levels to meet the needs for goods and services of the present population, without undermining the ability of future generations to meet their own needs.
alternative measures of gdp
Other than GDP and GNP, there are alternative measures of domestic income, such as national income, personal income and disposable personal income.
negative externality and example
Negative externalities are adverse consequences or costs imposed on a third party as a
result of a individual or firm undertaking economic activities. An example of this is Market
failure.
ad equation
AD(Aggregate demand) = C(Consumption) + I(Investment) + G(Government spending) +
X(Exports) - M(Imports)
what is recession
if gdp falls over two consecutive quarters
Explain the difference between material and non- material living standard.
Material living standards refer to how well off an individual or society is, when measure
in-terms of income, production and consumption. Non- material living standards are not
related to the quantity of good and services that we have but our element son our
wellbeing that affect the quantity of our real lives; freedom, happiness, natural
environment and family.
contraction
Contraction: GDP and production are slower
what are limitations of real gdp
dosnt represent quality of life for people and dosnt show how resources are allocated
aggregate demand side factors
Alter the levels of national spending on GDP and the economy’s productive capacity
what is real gdp
macroeconomic measure of the value of economic output adjusted for price changes
what is meant by market deregulation how can it assist economic growth
is a process to increase efficiency whereby the government reduces controls and restrictions that limit competition or the free operation of demand and supply in the determination of market prices.
