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AS Economics definitions Macro > Definitions > Flashcards

Definitions Flashcards

1
Q

Aggregate Demand (AD)

A

the total demand for a country’s goods and services at a given price level and in a given time period

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2
Q

Aggregate Supply (AS)

A

the total amount that producers in an economy are willing and able to supply at a given price level in a given time period

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3
Q

allocative efficiency

A

when consumer satisfaction is maximised

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4
Q

automatic stabilisers

A

forms of government spending and taxation that change automatically to offset fluctuations in economic activity

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5
Q

average propensity to save (APS)

A

the proportion of disposable income saved. It is saving divided by disposable income

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6
Q

average propensity to consume (APC)

A

the proportion of disposable income spent. It is consumer expenditure divided by disposable income

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7
Q

balance of payments

A

a record of money flows coming in and going out of an economy

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8
Q

capacity utilisation

A

the extent to which firms are using their capital goods

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9
Q

capital

A

man-made aids to production

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10
Q

circular flow of income

A

the movement of spending and income throughout the economy

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11
Q

claimant count

A

a measure of unemployment that includes those receiving unemployment-related benefits

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12
Q

consumer confidence

A

how optimistic consumers are about future economic prospects

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13
Q

consumer expenditure

A

spending by households on consumer products

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14
Q

consumer prices index

A

a measure of changes in the price of a representative basket of consumer goods and services. Differs from the retail price index (RPI) in methodology and coverage

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15
Q

corporation tax

A

a tax on firms’ profits

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16
Q

cost-push inflation

A

increases in the price level caused by increases in the costs of production

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17
Q

current acccount deficit

A

when more money is leaving the country than entering it, as a result of sales of its exports, income and current transfers from abroad being less than imports, income and current transfers going abroad

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18
Q

cyclical unemployment

A

unemployment arising from a lack of aggregate demand

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19
Q

deflation

A

a sustained fall in the general price level

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20
Q

demand-pull inflation

A

increases in the price level caused by increases in aggregate demand

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21
Q

developed economy

A

an economy with a high level of income per head

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22
Q

developing economy

A

an economy with a low level of income per head

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23
Q

direct tax

A

one that taxes the income of people and firms and that cannot be avoided

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24
Q

disposable income

A

income after taxes on income have been deducted and state benefits have been added

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25
dissave
spending more than disposable income
26
distribution of income
how income is shared out between househoulds in a country
27
economic cycle
the tendency for economic activity to fluctuate outside its trend growth rate, moving from a high level of economic activity (boom) to negative economic growth (recession)
28
economic efficiency
where both allocative and productive efficiency are achieved
29
economic growth
in the short run, an increase in real GDP, and in the long run, an increase in productive capacity, that is, in the maximum output that the economy can produce
30
economically inactive
people of working age who are neither employed nor unemployed
31
exchange rate
the price of one currency in terms of another currency or currencies
32
exports
products sold abroad
33
deflationary
policy measures designed to reduce aggregate demand
34
discretionary fiscal policy
deliberate changes in government spending and taxtation designed to influence aggregate demand
35
Fiscal drag
People's income being dragged into higher tax bands as a result of tax brackets not being adjusted in line with inflation
36
Fiscal policy
The taxation and spending decisions of a government
37
Frictional unemployment
Short-term unemployment occurring when workers are in-between jobs
38
Full employment
A situation where those wanting and able to work can find employment at the going wage rate
39
Government bond
A financial asset issued by the central or local government
40
Government spending
Spending by the central bank and local government on goods and services
41
Gross domestic product(GDP )
The total output of goods and services produced in a country
42
Human capital
Education, training and experience that a worker, or group of workers, possess(es)
43
Hyperinflation
An inflation rate above 50 per cent
44
Hysteresis
Unemployment causing unemployment
45
Imports
Products bought from abroad
46
Inflation
A sustained rise in the price level;the percentage increase in the price level over a period of time
47
Inflationary rise
The distortion of price list alas caused by inflation
48
Injections
Additions of extra spending into the circular flow of income
49
International labour organisation (ILO)
A member organisation of the Unites Nations that collects statistics on labour market conditions and seeks to improve working conditions
50
Investment
Spending on capital goods
51
Labour
The quantity and quality of human resources
52
Labour force
The people who are employed and unemployed,that is, those who are economically active
53
Labour force survey
A measure of unemployment based on a survey using the ILO definition of unemployment
54
Labour productivity
Output of a good or service per worker in a given time period
55
Leakages
Withdrawals of possible spending from the circular flow of income
56
Long-term unemployment
Unemployment lasting for more than a year
57
Macroeconomic equilibrium
A situation where aggregate demand equals aggregate supply and real GDP is not changing
58
Menu costs
The costs of changing prices due to inflation
59
Macroeconomics
Looks at the economy as a whole
60
Monetary policy
Central bank and /or government decisions on the rate of interest, the money supply and the exchange rate
61
Monetary policy Committee
A Committee of the Bank of England with responsibility for setting the interest rate in order to meet the government's inflation target
62
Multiplier effect
The process by which any change in a component of aggregate demand results in a greater final change in real GDP
63
Net exports
The value of exports minus the value of imports
64
Net savers
People who save more than they borrow
65
Nominal GDP
Output measured in current prices and so not adjusted for inflation
66
Occupational immobility of labour
Difficulty of moving from one type of job to another
67
Output gap
The difference between an economys actual and potential real GDP
68
Overheating
The growth in aggregate demand outstripping the growth in aggregate supply, resulting in inflation
69
Price level
The average of the prices of all the products produced in an economy
70
Privatisation
Transfer of assets from the public to the private sector
71
Productive potential
The maximum output that an economy is capable of producing
72
Productive efficiency
Where production takes a place using the least amount of scarce resources
73
Productivity
Output, or production, of a good or service per worker
74
Progressive tax
A tax that takes a higher percentage from the income of the rich
75
Protectionism
The protection of domestic industries from foreign competition
76
Quota
A limit on imports
77
Rate of interest
The charge for borrowing money and the amount paid for lending money
78
Real disposable income
income after taxes on income have been deducted and state benefits have been added and the result has been adjusted to take into account changes in the price level
79
Real GDP
The country's output measured in constant prices and so adjusted for inflation
80
Real interest rate
The nominal interest rate minus the inflation rate
81
Recession
A fall in real GDP over a period of six months or more
82
Reflationary
of policy measures designed to reduce aggregate demand
83
Regressive tax
A tax that takes a greater percentage from the income of the poor
84
Retail prices index RPI
Measure of inflation that is used for adjusting pensions and other benefits to take account of changes in inflation and frequently used in wage negotiations. Differs from the consumer prices index CPI
85
Retained profits
Profit kept by firms to finance investment
86
Saving
Real disposable income minus spending
87
Savings ratio
Savings as a proportion of disposable income
88
Shoeleather costs
Costs in terms of the extra time and effort involved in reducing money holdings.
89
Structural unemployment
Unemployment caused by the decline of certain industries and occupations due to changes in demand and supply
90
supply side policies
policies designed to increase aggregate supply by improving the efficiency of labour and product markets
91
sustainable economic growth
economic growth that can continue over time and does not endanger future generations' ability to expand productive capacity
92
target savers
people who save with a target figure in mind
93
tariff
a tax on imports
94
trade deficit
the value of imports exceeding the value of exports
95
trade surplus
the value of exports exceeding the value of imports
96
trend growth
the expecting increase in potential output over time. it is a measure of how fast the economy can grow without generating inflation
97
unemployment rate
the percentage of the labour force who are out of work
98
unemployment
a situation where people are out of work but are willing and able to work
99
voluntary export restraint (VER)
a limit placed on imports from a country with the agreement of that country's government
100
World Trade Organisation(WTO)
an international organisation that promotes free international trade and rules on international trade disputes

AS Economics definitions Macro (1 decks)

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