Commerce - Macro economics Flashcards
(26 cards)
What does a PPC show?
The maximum possible output using all resources efficiently.
What does a point on the PPC represent?
Efficient use of resources.
What does a point inside the PPC mean?
Inefficient use of resources.
What does a point outside the PPC mean?
Unattainable with current resources.
Name the 5 sectors in the circular flow.
Households, Firms, Government, Financial Sector, Overseas Sector.
What are real flows?
Goods, services, and resources (labour).
What are money flows?
Income, spending, taxes, exports, and imports.
Name 3 NZ exports.
dairy, meat, wine.
What is Aggregate Demand (AD)?
Total demand for goods/services in an economy.
What is Aggregate Supply (AS)?
Total supply producers are willing to sell.
Components of AD?
C + I + G + (X – M)
Consumption, Investment, Government Spending, Net Exports.
What does the AD/AS graph show?
Equilibrium at price level (PL) and output (Y).
3 main economic goals?
Growth, low unemployment, price stability.
How is economic growth measured?
Change in real GDP.
Factors that influence growth?
Investment, innovation, education, resources.
Benefits of growth?
More jobs, higher income.
Costs of growth?
Pollution, inequality, resource use.
Define inflation.
Rise in general price levels.
Define deflation.
Fall in general price levels.
Define disinflation.
Slower rate of inflation.
Define hyperinflation.
Extremely fast, out-of-control inflation.
How is inflation measured in NZ?
Using the Consumer Price Index (CPI).
What causes inflation?
Demand-pull (↑AD), Cost-push (↑AS costs).
Why is employment important?
Income, production, social stability.
