key words and phrases Flashcards

(27 cards)

1
Q

Goods market

A

goods + services

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2
Q

GDP

A

gross domestic product = the value of goods and services produced in the economy over a period of time

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3
Q

National income, national expenditure and GDP what is similar about these things

A

they are all the same

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4
Q

money that leave the circular flow is called

A

a leakage

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5
Q

what is Wealth

A

is a stock concept usually held in assets

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6
Q

what is income

A

flow concept like mount generated from wealth

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7
Q

A recession

A

two quarters of negative economic growth

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8
Q

what does real mean

A

takes into account inflation

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9
Q

PPP

A

purchasing power parities

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10
Q

what is potential growth

A

Long term growth is productivity potential in the 4 factors of production and aggregate demand

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11
Q

what is actual growth

A

Short term growth its % increase in real gdp aggregate supply

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12
Q

what is gni definition

A

includes the value of all goods and services produced by nationals

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13
Q

what is an white elephant

A

a infrastructure that isn’t used.

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14
Q

what are the economic agents

A

government, households workers firms and environment

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15
Q

what are savings

A

money not spent (income not spent)

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16
Q

what are investments

A

increases the value of money into capital - human skill + physical

17
Q

Aggreate demand

A

Total planned level of expenditure on goods and a services in an economy at a given price level

18
Q

short term aggregate supply

A

all factors of production are fixed with the exception of labour which can be hired to cover increases in aggregate demand

19
Q

long term aggregate supply

A

all factors of production are variable and can be increased over time it represents maximum possible output an economy can produce given 4 FOP resources

20
Q

marginal utility

A

marginal utility is the change in total utility or satisfaction derived from consuming an extra unit of a good or service

21
Q

utility

A

satisfaction attached to consuming goods or service

22
Q

Marginal product

A

is the difference between total output when an extra unit of the variable factor e.g. labour is added

23
Q

formula for marginal product

A

It is calculated as:
Change in total output
Change in variable input

24
Q

Production is measured in physical rather than in monetary terms so we can also use the term

A

Marginal Physical Product (MPP)

25
Marginal revenue
is the addition to revenue of selling an additional unit of output:
26
Marginal revenue product (MRP)
) is the change in total revenue from the employment of an extra unit of labour
27
negative output gap
The output gap is simply the difference between what the economy produces and what it could – potentially – produce. There is a negative output gap whenever potential GDP exceeds actual GDP