L6 Mock Theme 2 Flashcards
(30 cards)
Actual Economic Growth
Rate of growth of GDP in a period of time
Cost Push Inflation
Inflation caused by increases in costs of production in the economy
Demand pull inflation
inflation caused by excess demand in the economy
Consumption
total expenditure by houses on goods and services over a period of time
Deflation
a fall in the price level
aggregate demand
total of all demands/expenditure in economy at any given price
fiscal policy
The use of taxes, government spending and government borrowing by government to achieve its objectives
monetary policy
process whereby central banks attempt to control level of aggregate demand via changing interest rates or increasing money in economy
injection
spending not generated by households such as government expenditure
marginal propensity “”
proportion of a change in income which is “”
Investment
addition to the capital stock of the economy
output gap
difference between actual GDP and productive potential of the economy
stagflation
unemployment and inflation both high at the same time
recession
occurs when GDP falls for two consecutive quarters
quantitative easing
Monetary policy instrument where the central bank buys financial ass 🍑 ets in exchange for money in order to increase borrowing and lending in the economy
GDP
total value of output in an economy
Gross National Income
Brexit GDP - GDP + incomes earned abroad - income earned by non residents
Nominal GDP
Value of output (not adjusted for inflation, current)
Real GDP
Volume of output (adjusted for inflation, base year)
Gross National Product
Anti-Brexit GDP - Value of G&S produced by a country over a period of time + overseas interest payments n dividends
Purchasing Power Parities (PPPs)
measures prices of specific goods in different countries to determine strength of currency (power)
Disinflation
Reduction in rate of inflation
Current Balance
Balance of trade + Balance of ‘invisibles’ + net income & current transfers
Gross Investment
Amount of investment
