Key Terms Flashcards
Aggregate supply
The total value of goods and services supplied in the economy
Economic growth
The capacity of the economy to product more goods an services over time
Gross domestic product
The total value of goods and services produced in the economy
Negative output gap
Where the economy is producing less than its trend output
Positive output gap
When actual GDP exceeds trend GDP increasing inflationary pressure
Trade off
Where one macro-economic objective has to be curtailed in favour of another objective
Imports
Goods and services purchased from abroad
Exports
Goods or services sold aboard
Employment
Where labour is actively engaged in a productive activity usually in exchange for payments such as wages
Unemployment
Those without a job but who are seeking work at current wage rates
Exporting
The sale of goods and services to a foreign county - generates income for the home country
Importing
The purchase of goods and services from abroad - leads to expenditure from the home country
Economic indicators
Economic statistics that provide information about the expansions and contractions of business cycles
Nominal GDP / nominal national income / nominal output
GDP / income / output figures not adjusted for inflation
Real GDP / real national income / real output
GDP / income / output figures are adjusted for inflation
