Macro Flashcards
Macro-economic objective 1
Real economic growth per capita
Macro-economic objective 2
Low inflation of 2% +-1%
Macro-economic objective 3
Low unemployment
Macro-economic objective 4
A stable, balanced current account
Macro-economic objective 5
Reduce national debt
Macro-economic objective 6
Reduce inequality
Macro-economic objective 7
Reduce environmental damage
Index value =
New number/ the base value x 100
% change =
New Value - Old Value/ Old Value x 100
Aggregate demand
The aggregate demand curve shows the total amount of goods and services brought at any given price level, over a period of time
Aggregate supply
The aggregate supply curve shows the total goods and services produced in an economy at any given price level, over a period of time
Circular flow of income
The circular flow of income model shows how income flows between households and firms. Money flows from housegolds to firms, and then flows from firms back to housegold, in a continuous loop
Crowding out
This occurs when the government uses up more resources in an economy, leaving less resources available to private-sector firms
Injections of income
The introduction of additional income into the circular flow
The 3 injections of income
G government spending I investment X value of exports
