Def (chatgpt)

Question 1

What is National Income?

Answer 1

The total value of all goods and services produced in an economy over a period of time.

Question 2

What is Gross Domestic Product (GDP)?

Answer 2

The total market value of goods and services produced within a country in a given time.

Question 3

What is Real GDP?

Answer 3

GDP adjusted for inflation.

Question 4

What is Nominal GDP?

Answer 4

GDP measured at current prices, not adjusted for inflation.

Question 5

What is GNP (Gross National Product)?

Answer 5

GDP + income earned by nationals abroad – income earned by foreigners domestically.

Question 6

What is the Circular Flow of Income?

Answer 6

A model showing how money flows through households, firms, the government, financial and external sectors.

Question 7

What are Injections?

Answer 7

Money entering the circular flow (investment, government spending, exports).

Question 8

What are Withdrawals (Leakages)?

Answer 8

Money leaving the circular flow (savings, taxes, imports).

Question 9

What is the Multiplier?

Answer 9

The process by which an initial increase in spending leads to a larger increase in national income.

Question 10

What is Aggregate Demand (AD)?

Answer 10

The total demand for goods and services in the economy: C + I + G + (X – M).

Question 11

What is Aggregate Supply (AS)?

Answer 11

The total output of goods and services that firms are willing and able to produce at a given price level.

Question 12

What is Short-Run Aggregate Supply (SRAS)?

Answer 12

AS when only some factors (e.g. wages) are fixed.

Question 13

What is Long-Run Aggregate Supply (LRAS)?

Answer 13

AS when all factors of production can vary; represents the economy’s full capacity.

Question 14

What is Macroeconomic Equilibrium?

Answer 14

The point where AD equals AS.

Question 15

What is an Output Gap?

Answer 15

The difference between actual GDP and potential GDP.

Question 16

What is a Positive Output Gap?

Answer 16

When the economy is producing above its potential output.

Question 17

What is a Negative Output Gap?

Answer 17

When the economy is producing below its potential output.

Question 18

What is Economic Growth?

Answer 18

An increase in real GDP over time.

Question 19

What is Actual Growth?

Answer 19

Growth from using idle resources (movement inside PPF to on the curve).

Question 20

What is Potential Growth?

Answer 20

Growth from an outward shift in productive capacity (outward shift of PPF).

Question 21

What is Sustainable Growth?

Answer 21

Growth that can be maintained without environmental harm or inflation.

Question 22

What is the Economic Cycle?

Answer 22

Fluctuations in real GDP over time, including boom, slowdown, recession, recovery.

Question 23

What is a Boom?

Answer 23

A period of strong economic growth and low unemployment.

Question 24

What is a Recession?

Answer 24

Two consecutive quarters of negative GDP growth.

Question 25

What is Stagflation?

Answer 25

A period of stagnant growth and high inflation.

Question 26

What is Unemployment?

Answer 26

People who are willing and able to work but cannot find a job.

Question 27

What is Frictional Unemployment?

Answer 27

Short-term unemployment between jobs.

Question 28

What is Structural Unemployment?

Answer 28

Unemployment due to changes in industry structure or geographical immobility.

Question 29

What is Cyclical Unemployment?

Answer 29

Unemployment caused by lack of demand in a recession.

Question 30

What is Seasonal Unemployment?

Answer 30

Unemployment at certain times of the year.

Question 31

What is Real-wage Unemployment?

Answer 31

Unemployment caused when wages are above market-clearing level.

Question 32

What is Economic Inactivity?

Answer 32

People not in work and not actively seeking work (e.g. students, carers).

Question 33

What is the Claimant Count?

Answer 33

Measures unemployment by counting those claiming benefits.

Question 34

What is the Labour Force Survey (LFS/ILO)?

Answer 34

Measures unemployment via household surveys (more inclusive than Claimant Count).

Question 35

What is Inflation?

Answer 35

A sustained increase in the general price level.

Question 36

What is Deflation?

Answer 36

A sustained fall in the general price level.

Question 37

What is Disinflation?

Answer 37

A fall in the rate of inflation (prices still rising, but more slowly).

Question 38

What is the Consumer Price Index (CPI)?

Answer 38

Measures inflation using a weighted basket of goods and services.

Question 39

What is the Retail Price Index (RPI)?

Answer 39

Similar to CPI but includes housing costs like mortgage interest.

Question 40

What is Cost-push Inflation?

Answer 40

Inflation caused by rising production costs.

Question 41

What is Demand-pull Inflation?

Answer 41

Inflation caused by excess demand in the economy.

Question 42

What is an Index Number?

Answer 42

A statistical measure showing relative changes in data over time.

Question 43

What is Fiscal Policy?

Answer 43

The use of government spending and taxation to influence the economy.

Question 44

What is Expansionary Fiscal Policy?

Answer 44

Increasing G or cutting T to boost AD.

Question 45

What is Contractionary Fiscal Policy?

Answer 45

Cutting G or raising T to reduce AD.

Question 46

What is a Budget Deficit?

Answer 46

Government spending > revenue.

Question 47

What is a Budget Surplus?

Answer 47

Government revenue > spending.

Question 48

What are Automatic Stabilisers?

Answer 48

Fiscal tools that adjust automatically with the business cycle (e.g. benefits, tax revenue).

Question 49

What is Discretionary Fiscal Policy?

Answer 49

Deliberate changes in G or T to influence the economy.

Question 50

What is Monetary Policy?

Answer 50

The use of interest rates and money supply to influence AD.

Question 51

What is the Interest Rate?

Answer 51

The cost of borrowing or return on savings.

Question 52

What is the Base Rate?

Answer 52

The interest rate set by the Bank of England to control inflation.

Question 53

What is Quantitative Easing (QE)?

Answer 53

Central bank creates money to buy government bonds and stimulate lending.

Question 54

What is International Trade?

Answer 54

Exchange of goods and services between countries.

Question 55

What is the Balance of Payments (BoP)?

Answer 55

Records all financial transactions between a country and the rest of the world.

Question 56

What is the Current Account?

Answer 56

Records trade in goods/services, investment income, and transfers.

Question 57

What is the Capital/Financial Account?

Answer 57

Records capital flows (e.g. FDI, bonds, assets).

Question 58

What is a Current Account Deficit?

Answer 58

Imports > Exports → net money outflow.

Question 59

What is a Current Account Surplus?

Answer 59

Exports > Imports → net money inflow.

Question 60

What is an Exchange Rate?

Answer 60

The price of one currency in terms of another.

Question 61

What is a Floating Exchange Rate?

Answer 61

Currency value determined by market supply and demand.

Question 62

What does SPICED stand for?

Answer 62

Strong Pound = Imports Cheaper, Exports Dearer.

Question 63

What does WPIDEC stand for?

Answer 63

Weak Pound = Imports Dearer, Exports Cheaper.

Question 64

What is the AD/AS Model?

Answer 64

Shows interaction between aggregate demand and supply in the economy.

Question 65

What is the Keynesian LRAS?

Answer 65

Shows spare capacity at low output; becomes vertical at full employment.

Question 66

What is the Neoclassical LRAS?

Answer 66

Always vertical at full employment; assumes markets clear.