definitions (macro)

Question 1

define inflation

Answer 1

an increase in the general price level of goods/services with an economy resulting in a decrease in the purchasing power of money

Question 2

define deflation

Answer 2

a decrease in the general price level of goods/services within an economy resulting in an increase in the purchasing power of money

Question 3

define disinflation

Answer 3

a decrease in the rate of inflation (the general price level is increasing, but at a slower rate than before)

Question 4

define trade deficit

Answer 4

when a country’s total imports exceeds the value of their export revenue

Question 5

define trade surplus

Answer 5

when the countr’s trade exports revenue exceeds the cost of their imports

Question 6

define economic growth

Answer 6

an increase in the long term productive potential of an economy( an increase in the quantity of goods and services produced in the economy)

Question 7

Define GDP

Answer 7

the value of goods and services produced in a country over a given period of time

Question 8

define power purchasing parities

Answer 8

exchange rate of one country to another that compares cost of living in different countries through comparing the value of a basket of goods

Question 9

define GNI

gross national income

Answer 9

the value of goods and services produced over a given period of time plus net overseas intrest payments and dividends

Question 10

define consumer price index

Answer 10

the official measure used to calculate inflation , using a weighted basket of goods

Question 11

define claimant count

Answer 11

a measure of unemplyment; the number of people recieving benefits for being unemployed

Question 12

define unemployment

Answer 12

those who are without work and able to start working in the next 2 weeks and have been activley searching for work in the past 4 weeks

Question 13

define the labour force survey

Answer 13

a measurment of unemployment which surveys people and classes thm as employed, unemployed or economically uneavtive as per to the ILO definitions

Question 14

define balance of payments

Answer 14

a record of all financial transactions between an economy and the rest of the world

Question 15

define current account

Answer 15

a record of payment for the purchase and sale of goods/services as well as income and transfers

Question 16

define current account deficits

Answer 16

when net external trade and income is negative leading to a net outflow of demand from the circular flow

Question 17

define current account surplus

Answer 17

when the net external trade and income is positive leading to net injection into the circular flow

Question 18

define aggregate demand

Answer 18

the total amount of goods and services demanded in the economy at a given time and price level

Question 19

define aggregate supply

Answer 19

total planned output of goods and servives in an economy at a given time and price level

Question 20

define consumption

Answer 20

total planned household spending

Question 21

define disposable income

Answer 21

the income that households have to devote to consumption and saving, taking into account payments of direct taxes and transfer payments

Question 22

animal spirits

Answer 22

the level of confidence of business owners

Question 23

average propensity to consume

Answer 23

the proprtion of income that households devote to consumption

Question 24

define gross investment

Answer 24

total investment calculated by adding new investment to replacement investment

Question 25

define investment

Answer 25

spending by busininessses on capital goods, which leads to the creation of real goods

Question 26

net trade

Answer 26

imporst minus exports

Question 27

exports

Answer 27

goods/services sold to foreigners that brimg income into the country

Question 28

define imports

Answer 28

goods/services bought from foreigners thattakes income out of the country

Question 29

define net investment

Answer 29

investment adjusted for depreciation; gross investment minus depreciation

Question 30

wealth

Answer 30

a stock of assets

Question 31

define income

Question 32

define national income

Answer 32

the total income earned by all factors of production in an economy at a given time frame

Question 33

define GDP per capita

Answer 33

national income per head of population, used a s a measurment for standard of living (total GDP/population)

Question 34

define the balance of trade

Answer 34

the difference between the value of a country's exports and imports of goods and servives combined

Question 35

define Long run aggreagte supply

Answer 35

the tottal output an economy can produce when operating at full output

Question 36

define short run aggregate supply

Answer 36

aggregate supply when at least one factor of production is fixed

Question 37

define injections

Answer 37

variables in an economy that add to the circular flow of income. They include: investment(I), goverment spending (G) and exports (X)

Question 38

define withdrawals

Answer 38

variables in an economy that remove money flows from the circular flow of income. Saving (S), Imports(I), taxes(T)

Question 39

marginal propensity to save

Answer 39

the proportion of additional income that is saved

Question 40

marginal propensity to import

Answer 40

the propertion of additional income that is spent on imports

Question 41

define marginal propensity to tax

Answer 41

the proprtion of additional income that is taxed

Question 42

define marginal propensity to consume

Answer 42

the proprtion of additional income that is sepnt on the goods in the economy (consumed)

Question 43

define marginal propensity to withdraw

Answer 43

the proprtion of additional income that is withdrawn from the economy (saved, taxed or spent on imports)