Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

MacroEconomics > Economic growth > Flashcards

Economic growth Flashcards

(57 cards)

Start Studying
1
Q

What is GDP?

A

The value of goods and service within an economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is GDP per capitia?

A

the sum of gross value added by all resident producers in the economy plus any product taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is PPP?

A

PPP (Purchasing Power Parity) is a measure that compares different countries’ currencies by determining the relative price of a similar basket of goods and services in each nation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is GNI and what does it do?

A

Gross national income- is the total amount of money earned by a nation’s people and businesses.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is inflation?

A

an increase in the general price level due to the increase in the money supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is deflation?

A

A fall in the general price level due to a decrease in the money supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is disinflation?

A

A reduction in the rate of inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is CPI?

A

The Consumer Price Index (CPI) measures the monthly change in prices paid by consumers. Weighted by a basket of goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is RPI?

A

Measure of prices of goods and services, includes housing costs like mortgage interest and council tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is demand pull inflation?

A

A rise in the general price level when demand for goods and services exceeds supply in the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is cost pull inflation?

A

Cost-push inflation, occurs when overall prices increase due to increases in the cost of wages and raw materials.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the different government policies?

A

Supply side-policies, demand side-policies, monetary policy, fiscal policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the main government objectives?

A

T-Trade
I-Inflation (+/- 2%)
G-Growth
E- Employment
R-Redistribution of income
S-Sustainability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are supply side policies

A

government strategies that focus on enhancing an economy’s ability to produce goods and services.( usually through intervention ie : education)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are demand side policies

A

focused on increasing or decreasing aggregate demand to influence unemployment, real output, and the price level in the economy ( includes fiscal policies, tax etc..)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is monetary policy?

A

a set of actions to control a nation’s overall money supply and achieve economic growth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is fiscal policy?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are automatic stabilisers?

A

Automatic stabilisers are automatic fiscal changes as the economy moves through stages of the business cycle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the accelerator affect?

A

changes in investment linked to economic growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the multiplier effect?

A

A process in which any changes in the components of AD , will lead to a greater national output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is discretionary fiscal policy?

A

These are intentional government policies to increase or decrease spending or taxation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is contractionary fiscal policy?

A

measures governments take to reduce their spending and increase taxes, leading to a decrease in economic growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is expansionary fiscal policy?

Study These Flashcards
A

increasing spending or cutting taxes to prevent or end a recession or depression

24
Q

What is quantitative easing?

Study These Flashcards
A

Purchase of assets such as bonds in order to increase money supply

25
What is quantitative tightening?
To decrease liquidity within the economy, reducing money supply ( bond holdings BOE)
26
What is contractionary monetary policy?
the rate of monetary expansion by a central bank
27
What is expansionary fiscal policy?
a policy by monetary authorities to expand the money supply and boost economic activity by keeping interest rates low to encourage borrowing by companies, individuals and banks.
28
What is crowding out?
public sector spending drives down or even eliminates private sector spending
29
What is the formular for the multiplier effect?
1/(MPW) =1/MPS+MPT+MPM
30
Formula for MPS?
1/(1-MPC)=1/MPS
31
Formula for MPW?
1/ (MPS+MPT+MPM)
32
What would a reduction in GDP lead to?
Increased unemployment, reduction in government tax revenue , fall in living standards => Less demand so firms will reduce costs => Consumers working less/making less profit => Drop in demand for goods/services
33
What is potential economic growth?
the rate of growth that an economy can sustain over the medium term without generating excess inflation.
34
What is actual potential economic growth?
the yearly increase in real Gross Domestic Product (GDP), reflecting the economy's performance over a short period
35
What are characteristics of a recession?
Inflation, unemployment, falling profits , increased budget defecit
36
What would cause an increase in the value of the multiplier effect?
- Increase in government spending, Increase MPC, Decrease MPS, Low tax rates, low import rates
37
What are 3 injections in the circular flow of income?
Investment , Government spending , Exports
38
What are 3 with-drawls circular flow of income?
Savings , Taxes and Imports
39
What is long-term GDP growth?
Sustained period of GDP growth
40
What is short-term GDP growth?
Short-term GDP growth is influenced by business cycles, policy changes, and temporary shocks (e.g., stimulus spending, recessions, supply chain disruptions). It fluctuates year to year.
41
Relationship between fiscal deficit and total national debt?
Fiscal deficits will increase national debt as government has to increase borrowing to increase debt
42
What are 3 automatic stabilisers?
tax cuts, government spending, subsidies
43
What is real national income?
the total value of goods and services produced in an economy in a given period of time. It is the same as nation output (GDP).
44
What is GNP?
Gross national product.Value of economic output
45
What is national income?
total spending on goods and services
46
What is the definition of the circular flow?
Money that flows between different economic agents, includes injections and withdrawals
47
What are examples of withdrawals in circular flow of income?
-savings -taxes -imports
48
What does the laffer curve show?
Whether increased tax rates will increase to increased tax revenue
49
What is the conclusion of the laffer curve?
Increasing taxes will increase tax revenue up to a point, however increasing tax beyond efficient tax rate will see reduction
50
What does the SR Phillips curve show?
Shows the inverse relationship between inflation rate and unemployment
51
How is CPI calculated?
.To calculate CPI, a representative basket of goods and services commonly bought by average households is selected A survey is then carried out to record the average prices of the items in this basket .These prices are compared to those in a base year, which is used as a point of reference to measure how much prices have changed
52
What is a positive output gap?
A positive output gap occurs when actual GDP is above potential GDP. The economy is overheating Demand > supply capacity Leads to inflationary pressure Unemployment is usually low
53
What is a negative output gap?
A negative output gap occurs when actual GDP is below potential GDP. The economy is underperforming There is spare capacity Leads to deflationary pressure Unemployment is usually high
54
What is "Crowding In" in economics?
Crowding In occurs when increased government spending leads to more private sector investment.
55
Difference between fiscal and national debt?
Fiscal: gov. spending>tax revenue National debt: Total debt accumulated (Fiscal debt adds onto national debt)
56
Cons of using GDP?
No inequality Environmental damage Happiness Cost of living
57
What macro-economic factors affect growth?
-population change -trade liberalisation -Tax/benefit changes -Competitiveness Government policies (monetary/fiscal) -Inflation -Exchange rates

MacroEconomics (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions