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Economics > Macro > Flashcards

Macro Flashcards

0
Q

Aggregate demand

A

Total planned spending on domestic output at a given price level.
Equation?

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1
Q

Actual economic growth

A

Increase in real GDP

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2
Q

Aggregate supply

A

Total value of output all producers are willing and able to supply at a given price level.

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3
Q

Appreciation

A

Rise in value of assets.

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4
Q

Austerity

A

Economic policy aimed at reducing a governments deficit.

Achieved by increasing tax and or reducing g spending/ future spending commitments.

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5
Q

Automatic stabilisers

A

Forms of g spending and taxation that dampen down fluctuations without any deliberate government policy

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6
Q

Balance of payments

A

Record of a country’s financial inflows and outflows trade and investment with other countries.

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7
Q

Balanced budget

A

G spending equals g revenue(tax)

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8
Q

Budget

A

Statement if a governments spending and tax revenues for the next financial year.

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9
Q

Deficit

A

G spending > taxation

Can be reduced by austerity measures or economic growth

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10
Q

Surplus

A

Tax > g spending

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11
Q

Business confidence

A

Expectations about the future of the economy

Affects business decisions with regards to capital goods = investment

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12
Q

Capital market

A

A stock of bond market where firms can raise mooney for investment.

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13
Q

Claimant count

A

The number of people claiming unemployment related benefits.

Measure unemployment - labour force survey

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14
Q

Consumer confidence

A

Expectations about future based on interest rates, incomes and jobs which affect household expenditure.

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15
Q

Comparative advantage

A

The ability to produce a product at a lower opportunity cost than other countries,regions,firms, or people.

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16
Q

Consumer price index

A

Preferred measure if inflation which excludes housing but includes all households

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17
Q

Circular flow of income

A

Flow of products and services and income between producers/ firms and households/ consumers
Draw

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18
Q

Closed economy

A

Economy operating without imports/ exports

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19
Q

Corporation tax

A

Tax on firm profits

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20
Q

Cost push inflation

A

Increases in the price level resulting from increases in costs of production.

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21
Q

Current account balance

A

A record of a country’s trade I goods, trade in services, income, and current transfers.
Look up

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22
Q

Cyclical trade deficit

A

Trade deficit which arises purely due to changes in the economy’s cycle ?
May not be relevant.

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23
Q

Cyclical unemployment / demand deficient un

A

Unemployment resulting from a lack of ad

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24
Q

Deflation

A

A sustained fall in the average price level

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25
Q

Deflationary fiscal policy

A

Measure to reduce ad

Look up

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26
Q

Demand management policies

A

Monetary and fiscal policies to influence the ad for goods and services in an economy

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27
Q

Demand pull inflation

A

Increases in the average price level beyond the capability of productive capacity to fully meet it.

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28
Q

Depreciation

A

A fall in the value of one currency compared to another

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29
Q

Deregulation

A

A removal of laws and regulation which restrict competition.

Supply side policy

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30
Q

Direct tax

A

Taxes on income and wealth of people and firms, income/ corporation tax.

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31
Q

Discretionary fiscal policy

A

Deliberate changes in g spending , borrowing and taxation to affect aggregate demand,

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32
Q

Discretionary incomes

A

Income after tax and essential bills and the addition of state benefits.

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33
Q

Disequilibrium

A

Imbalance. Curves don’t cross.

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34
Q

Disposable income

A

Income after the deduction of tax and addition of state benefits.

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35
Q

Dividends

A

A share if profits of firms which is distributed to shareholders.

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36
Q

Domestic trade

A

The exchange if products within an economy

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37
Q

Dumping

A

Exporting below domestic price or charging below cost of supply.

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38
Q

Economic cycle

A 
Variations in annual rate of growth of an economy over time.
Draw including
Recovery
Boom
Slow down 
Recession
Output gaps
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39
Q

Economic growth

A

The growth in the value of output of an economy and , in the long run, an increase in productive capacity.

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40
Q

Economic stability

A

Avoidance in volativility in economic growth, inflation, unemployment and exchange rates.

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41
Q

Economically inactive

A

Those of working age who are neither in work nor seeking work.

42
Q

Exchange rates

A

The price of a currency in terms of another currency.

43
Q

Expansionary monetary policy

A

Changes in the money supply ( increase), interest rates (cut), and or exchange rates (lower), designed to stimulate ad.

44
Q

Fiscal drag

A

The reduction in disposible income that occurs if tax bands are not adjusted inline with inflation.

45
Q

Fiscal policy

A

A gorge meets policy regarding tax and spending.

46
Q

Fiscal stimulus.

A

Normally involving increased spending and lowering tax to jolt the economy.

47
Q

Foreign direct investment.

A

Investment from one country into another that involves establishing operations or aquiring tangible assets.

48
Q

Free trades

A

When trade us allowed to occur without any form of restriction such as a tariff of quota.

49
Q

Frictional unemployment

A

Un arising when people are between jobs

50
Q

Full employment. Yfe

A

Condition in national economy where all, nearly all persons are willing and able to work at the prevailing wages and work conditions are able to do so.

51
Q

GDP

Gross domestic product

A

The total value of all goods and services produced by factors of production based in an economy.
Can be measured by income, output and expenditure methods.

52
Q

GDP per capita

A

GDP / population

53
Q

Geographical mobility.

A

The movement of an economic resource from one are to another.

54
Q

Hot money flows

A

Flows of short term finance that moves around the world to take advantage of differences in interest rates and possible exchange rate changes.

55
Q

Household wealth

A 
The value of stocks and asset 
Including property
Shares
Savings
Pension funds
56
Q

Human capital

A

The knowledge and skills workers learn through education, training and experience.

57
Q

Hyperinflation

A

Very high rate of inflation which causes serious economic problems and politically instability.

58
Q

Hysteresis

A

Un generating Un by reducing the confidence and relevance of the skills of unemployed people.

59
Q

Imports

A

Products bought from abroad

60
Q

Immobility of labour

A

Barriers to the movement if people between areas (geographical) and jobs ( occupational)

61
Q

Income distibution

A

The extent to which different groups of households share the total income of the country

62
Q

Income elasticity of demand

A

The responsiveness of demand to changes in real incomes of consumers.

63
Q

Indirect tax

A

Taxes in consumption of g and s.

Vat

64
Q

Inflation

A

A sustained rise in the average price levels.

65
Q

Inflationary noises

A

The distortionary effect inflation can have in price signals

66
Q

Inflationary pressures

A

Demand and supply side pressures that can cause a rise in the general price level.

67
Q

Inflation target

A

The CPI target if the bofe is 2%. Plus and minus 1%

68
Q

Infrastructure

A

The transport links, communication networks, sewage systems, energy plants and other facilities necessary for the efficient running of a country.

69
Q

Injections

A

Government spending, investment, exports.

70
Q

International trade

A

Exchange of g and s across national boundaries.

71
Q

Investment

A

Spending in capital goods .

72
Q

Macroeconomic equilibrium

A

Situation where ad equals as an so there are no forces to change price level and output.

73
Q

Labour force survey

A

All those who are actively seeking work and are available to start work , whether or not they are claiming benefits.
Measures Un

74
Q

Labour supply

A

The number of people able, available and willing to work at prevailing wage rate,

75
Q

Marginal propensity to consume

A

The proportion of any additional income which is spent rather than saved.

76
Q

Marginal propensity to save

A

The proportion of any additional income which is saved rather that spent.

77
Q

Market failure

A

Under/over consumption of product / consumption at a given price level. Keynesians believe the gov should intervene to correct it.

78
Q

Menu costs

A

Costs involved in having to change prices as a result of inflation.

79
Q

Monetary policy

A

Changes in the money supply, rate in interest, or exchange rate,

80
Q

Mpc

A

Committee of the bofe that determines the rate if interestwith objective of meeting gov inflation target

81
Q

Money supply

A

The entire quantity of country’s commercial bills, coins, loans and credit.

82
Q

Multiplier

A

An increase in an injection into the circular flow of income causing a greater increase in ad.

83
Q

Nominal GDP

A

GDP at current prices.

84
Q

Potential economic growth

A

Increases in the ability of a country’s ability to produce g and s

85
Q

Productivity

A

Output per worker per period of time

86
Q

Progressive taxes

A

Taxes which take a greater percentage of the income of rich people than that of poor people.

87
Q

Rate of interest

A

The cost of borrowing and return to savers.

88
Q

Rate of Un

A

The number of people who are willing and able to workout are not in work as a percent of labour force

89
Q

Rate ofte of inflation

A

Inflation as a percentage

90
Q

Real GDP

A

GDP adjusted for inflation. At constant prices

91
Q

Reflection army fiscal policy.

A

Measure designed to increase ad.

92
Q

Regional Un

A

People who are willing and able to work but do not have work while there are vacancies in another area.

93
Q

Retail price index

A

A weighted measure of changes in consumer prices.

Look up.

94
Q

Shoe leather cost

A

Cost involved in moving money around during period of inflation in a bid to maintain its real value, and costs incurred when looking for a cheaper supplier.

95
Q

Structural Un

A

A mismatch in the demand for skills as a result in the changing pattern in the industry,

96
Q

Supply side policies.

A

Policies designed to increase the economy’s long term potential growth.

97
Q

Sustainable economic growth

A

Economic growth achieved in a way that does not endanger the country’s ability to achieve economic growth in the future.

98
Q

Tariff

A

Tax on imports.

99
Q

Transfer payments

A

Money transferred from one group to another not in return for providing a g or s . Can’t be included when calculating GDP.

100
Q

Trend growth

A

Long term path of an economy.

Draw.

101
Q

Un

A

When people able and willing to work are not in paid employment but are receiving Un benefits.

102
Q

Wealth distribution

A

The extent to which different groups of households share the total wealth of the country.

103
Q

Withdrawals.

A

Leakages
Savings
Tax
Imports

Economics (5 decks)

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