Deck 2: Economic Policy Objectives Flashcards
(14 cards)
Q: 📊 What is economic growth?
A: An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.
Q: 🌍 What is economic development?
A: Progress in an economy, signified by improvements in indicators such as literacy rates, life expectancy, and poverty rates.
Q: 👷♂️ What is unemployment?
A: The situation where individuals who are capable of working and are actively seeking work remain unemployed.
Q: 📈 What is inflation?
A: The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
Q: 📉 What is deflation?
A: A decrease in the general price level of goods and services, often associated with reduced consumer spending.
Q: 📏 How is inflation measured?
A: Using indices like the Consumer Price Index (CPI) and Retail Price Index (RPI).
Q: ⚖️ What is the balance of payments?
A: A record of all economic transactions between residents of the country and the rest of the world.
Q: 💰 What is income distribution?
A: The way in which a nation’s total income is distributed among its population.
Q: 📉 What causes cyclical unemployment?
A: A downturn in the business cycle leading to reduced demand for goods and services.
Q: 🏗️ What causes structural unemployment?
A: Long-term shifts in the economy that change the demand for certain skills.
Q: 🕒 What is frictional unemployment?
A: Short-term unemployment occurring when people are between jobs.
Q: ❄️ What is seasonal unemployment?
A: Unemployment linked to seasonal work patterns.
Q: 📉 What are the consequences of deflation?
A: Decreased consumer spending, increased real debt burdens, and potential economic stagnation.
Q: 📉 What is the natural rate of unemployment?
A: The level of unemployment consistent with a stable rate of inflation.
