Key Terms Unit 2 Flashcards
Deflation
A decrease in the price of an item due to the currency strengthening
Inflation
The rise of a price of an item die to the currency depreciating in value
CPI
Consumer price index ( everything but housing costs)
RPI
retail price index (everything including housing)
Family expenditure survey
10’000 stratified households surveyed on spending habits
Commodities
Natural resources traded on international level
Inflation target
A target set by the central bank
GDP
Gross domestic product (all goods produced in the uk not uk owned products abroad)
GNP
Gross national product (uk made goods home and abroad)
Nominal
Not taking inflation into account
Real
Taking inflation into account
Per capita
Per person in a population
Recession
Negative growth for two consecutive quarters
Unemployment
People able and willing to work but not in work
ILO/IFS
A survey of population to see who is in work and who isn’t
Claimant count
A survey to see who claims unemployment benefit
Balance of payments
A record of payments between one country and the rest of the world ( tangible products, services, investment income and transfers)
Purchasing power parity
A way of measuring exchange rates using the idea of how much a basket of goods costs in various countries
Economic growth
A measure of the value of output of goods and services over a period of time (GDP/GNP)
Economic development
A measure of welfare in society
HDI
A measure of economic development (education, health and living standards)
Economic model
Simplified theoretical model of an economy
Circular flow of income
Shows the flow of goods, services and factors of production around the economy
Simplified model of circular flow of income
Takes only households and firms into account
