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Year 1 Micro > Macro 1 > Flashcards

Macro 1 Flashcards

(90 cards)

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1
Q

Accelerator effect

A

The relationship between the change in new investment and the rate of change of national income

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2
Q

AD

A

Total planned expenditure in the economy C I G X-m

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3
Q

AS

A

The total value / amount of g and s supplied in an economy

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4
Q

Balance of payments

A

A record of a country’s international transactions over a year

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5
Q

Balance of trade

A

Visible exports minus visible imports

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6
Q

Balanced budget

A

Where government receipts equal government spending in a fiscal year

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7
Q

Bank rate

A

The IR set by the BoE

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8
Q

Bond

A

A method used by the government to finance. Budget deficit, issued in return for money and interest

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9
Q

Boom

A

Period of above average short run economic growth

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10
Q

Broad money

A

Money held on banks and building societies that is not immediately accessible

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11
Q

Budget deficit

A

Where gov spending exceeds gov receipts in a fiscal year

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12
Q

Budget surplus

A

Where gov receipts exceed gov spending a fiscal year

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13
Q

Central bank

A

The financial institution typically responsible for setting short term interest rates and issuing notes and coins

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14
Q

Circular flow of income

A

Model explaining the equilibrium level of national income

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15
Q

Claimant count

A

A measure of unemployment- the number claiming unemployment benefits

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16
Q

Consumption

A

Spending by domestic households on g and s

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17
Q

Cost push inflation

A

Where increases cost of production result in firms increasing there prices , leading to an increase in the general price level

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18
Q

CPI

A

Consumer price index - target measure for inflation by the MPC of the BoE

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19
Q

Credit crunch

A

When borrowing becomes more expensive or unavailable

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20
Q

Current account

A

Part of the BoP which looks at the net income flows earned through either trade in G and S or the reward from investments located overseas

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21
Q

Current account deficit

A

Where the flows of money from trade and other incomes out of the country are greater than the equivalent flows into the country

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22
Q

Cyclical unemployment

A

Demand deficient unemployment that results from a downturn in the economic cycle

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23
Q

Deflation

A

A situation where the general price level falls

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24
Q

Deindustrialision

A

A fall in the proportion of national output acccountdd for by the manufacturing sector of the economy

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25
Demand management
Using monetary and fiscal policy to control AD to minimise fluctuations in the economic cycle
26
Demand pull inflation
Where AD exceeds AS leading to an invrease in the price level
27
Demand side shock
Unexpected and significant changes in the level of AD
28
Deregulation
The process of removing gov controls from markets
29
Direct tax
One that cannot be passed on to another person and is usually levied on incomes
30
Disinflation
Where the rate of inflation is falling but still positive
31
Discretionary fiscal policy
The deliberate manipulation of gov spending and taxation to influence the economy
32
Disposable income
Income available to households after the payment of income tax and national insurance contributions
33
Downtown
Period of the economic cycle where short run economic growth falls from above average to below average
34
Economic cycle
The tendency for economic growth to fluctuate over time
35
Economic shock
Sudden, unexpected events that will affect the macroeconomy in a significant way
36
Exchange rate
The price of one currency expressed in terms of another
37
Exports
G or s sold abroad
38
Fiscal policy
Control of the economy via the use of taxation and gov spending
39
Frictional unemployment
People between jobs
40
Full employment
The level of employment where all those economically active are able to find work at the going wage rate
41
GDP
Gross domestic product- the total value of g and s produced in the economy
42
Globalisation
The ability to produce goods anywhere in the world and sell them in any country
43
Gov expenditure
Spending by the gov on current and capital items , at both local and national level
44
Hot money
Money that is liable to rapid transfer from one country to another
45
Human capital
The skills , abilities, knowledge and motivation of labour
46
Imports
Purchase of g and s from abroad
47
Income
A flow of income to a factor of production over a period of time e.g. Salary
48
Index number
A number designed to be used to show the percentage changes in a variable over time , where 100 is the value in the base period
49
Inflation
A persistent increase in the general price level
50
Injection
Money that originates outside the circular flow of income and so boosts national income
51
Interest rates
The cost of borrowing, the reward for saving or the opportunity cost of spending
52
Investment
Spending by firms on new capital equipment
53
Labour force
Those of working age who are either in work or actively seeking work
54
Macroeconomic equilibrium
The level of national income where there is no tendency for it to rise and fall
55
Monetary policy
Controlling the economy via changes in IR and the money suppply
56
Mortgage
Loan to buy a property
57
MPC
The monetary policy committee of the BoE who meet monthly to decide whether or not to alter the base rate of interest
58
Money supply
The total amount of money in an economy
59
Multiplier effect
Where an increase or decrease in spending leads to a larger then proportional change in national income
60
Narrow money
Notes , coins and balances available for current transactions
61
National debt
The stock of all outstanding government debt that has yet to be repaid
62
National income
The total income generated within an economy over a period of time
63
Negative equity
Situation where the value of ones house is lower than the outstanding mortgage
64
Negative output gap
Where the economy is producing less than its trend output
65
Nominal
Not adjusted for inflation
66
Output gap
The difference between actual growth and trend growth
67
Participation rate
Proportion of the country's working age population that makes up the labour force
68
Policy conflict
Where attempts to achieve one macro policy involves a trade off with another objective
69
Positive output gap
When actual GDP exceeds the trend rate of GDP , increasing inflationary pressures
70
Price level
The average level of prices of a range of g and s at a point in time
71
Primary income
Flows of income from investments abroad minus flows of income from foreign investments in the U.K.
72
Privatisation
Sale of government owned assets to the private sector
73
Progressive tax
Whose on higher incomes pay a higher proportion of their income in tax compared with those on lower incomes
74
Proportional tax
Where everyone pays the same proportion of their income in tax
75
Real GDP
Gross domestic product, adjusted for the effects of inflation
76
Recession
2 or more quarters of negative growth
77
Recovery
When short run economic growth starts to increase after a recession
78
Regressive tax
Where those on lower incomes pay a higher proportion of their income in tax compared with those on higher incomes
79
Structural unemployment
Unemployment caused by a change in demand in an economy
80
Subsidy
A payment made by government to producers to encourage greater production of a g or s
81
Supply side improvements
Increases in an economy's productive capacity arising out of businesses improving the efficiency of markets
82
Supply side shock
Unexpected and significant changes in the price and / or availability of factors of production
83
Tariff
A tax on imports
84
Transmission mechanism
How changes in the rate of interest influence the components of AD
85
Unemployment
Those of working age who are willing and able to work who do not currently have a job
86
Unemployment rate
The number of unemployed people expressed as a percentage of the current labour force
87
Unemployment trap
Where individuals receive more in benefit payments than they would in income in employment
88
Wealth
A stock of owned assets e.g. Housing property , shares
89
Wealth effect
Where a rise in the value of household wealth encourages consumers to spend more and save less
90
Withdrawals
Money taken out of the circular flow of income, which reduces national income

Year 1 Micro (3 decks)

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