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Economics Definitions > Macro Definitions > Flashcards

Macro Definitions Flashcards

(62 cards)

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1
Q

Economic growth

A

Growth in GDP over time

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2
Q

Gross Domestic Product

A

Total value added of G/S produced in the country in a year

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3
Q

GDP per capita

A

GDP divided by the population

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4
Q

Boom

A

Period of high economic activity and high levels of employment

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5
Q

Recession

A

Period when country’s GDP falls for 2+ consecutive quarters

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6
Q

Labour force, workforce

A

The number of people who work in a country

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7
Q

Employment

A

Use of labour in the economy to produce G/S

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8
Q

Unemployment

A

When workers ABLE AND WILLING to work at the current wage rates are unable to find employment

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9
Q

Claimant Count

A

Method of measuring unemployment:
- Number of people who are claiming unemployment-related benefits

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10
Q

Level of unemployment

A

Number of people in working population who are unemployed

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11
Q

Rate of unemployment

A

% of country’s workforce that is unemployed

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12
Q

Frictional unemployment

A

Unemployment caused by TIME LAGS when workers move between jobs :)

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13
Q

Seasonal unemployment

A

Unemployment caused by a FALL IN DEMAND during season :(

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14
Q

Structural unemployment

A

Unemployment caused by PERMANENT DECLINE of industry

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15
Q

Cyclical unemployment

A

Unemployment caused by a LACK OF DEMAND in economy (recession)

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16
Q

Income distribution

A

How incomes are shared out between individuals and households

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17
Q

Income

A

Reward for the service provided by labour

Flow of money over time

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18
Q

Wealth

A

Market value of ALL ASSETS owned by a person, group or country at a specific point in time.

Stock of assets

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19
Q

Gross Income

A

Income received before taxes/benefits given

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20
Q

Net Income

A

Income after effect of direct taxes/benefits (DISPOSABLE INCOME)

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21
Q

Distribution of wealth

A

How wealth is shared out between individuals and households

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22
Q

Cost of Living

A

Price level of G/S bought (by average family)

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23
Q

Inflation

A

Sustained rise in the general price level over time

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24
Q

Price stability

A

When general level of prices stays constant over time OR grows at low rate (2% ±1)

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25
Rate of Inflation
% Rise in general price level over time
26
Consumer Price Index (CPI)
Method used to calculate rate of inflation, using basket of G/S
27
Government Spending
Total amount of money spent by a gov. in a given period of time.
28
Direct tax
Tax on income/wealth
29
Indirect tax
Tax on spending (G/S)
30
Government revenue
Source of finance for gov. spending
31
Balanced government budget
Tax Revenue = Gov. spending
32
Budget deficit
Government spending > Tax Revenue
33
Budget surplus
Tax Revenue > Government spending
34
Fiscal policy
Policy that uses gov. spending + taxation to affect the whole economy
35
Income & Wealth Redistribution
Gov. action, using TAXATION AND BENEFITS, to reduce inequalities of income/wealth.
36
Progressive tax
GREATER % of tax as income increases
37
Exports
G/S sold abroad
38
Imports
G/S bought from abroad
39
International trade
Exchange of G/S between countries
40
European Union
Economic + political group of countries in Europe that have FREE TRADE with each other
41
Free trade agreement
Free movement of G/S between countries, with NO RESTRICTIONS
42
Balance of payments
Record of all financial transactions between one country and rest of world.
43
Current account
Record of trade in G/S, income flows and transfers between one country and the rest of world.
44
Balance of payments on current account
Total of net trade in G/S, income flows and transfers between one country and rest of world.
45
Balanced current account
Sum of exports + inflow of income/transfers = sum of imports + outflow of income/transfers
46
Current account deficit
Sum of exports + inflow of income/transfers LESS than sum of imports + outflow of income/transfers
47
Current account surplus
Sum of exports + inflow of income/transfers GREATER than sum of imports + outflow of income/transfers
48
Monetary policy
Policy that controls the total supply of money in the economy to achieve the government's economic objectives, esp. price stability.
49
Supply-side policy
Policy that increases the productive potential, which is the ability of the economy to supply more G/S.
50
Externality
Effect of an economic activity on a third party.
51
Negative externality
Harmful effect of an economic activity on third parties, also known as an external cost.
52
Positive externality
Beneficial effect of an economic activity on third parties, also known as external benefit.
53
State provision
G/S directly provided by the government.
54
Legislation
Laws to control the way people and organisations behave
55
Regulation
rules, directives or government orders to control the way people and organisations behave.
56
Information provision
Government provides info to encourage people (esp. consumers) and organisations to change their behaviour.
57
Currency
System of money used in a country or group of countries
58
Exchange rate
Price of one currency in terms of another currency
59
Globalisation
Expansion of world trade in G/S, together with capital flows, leading to greater international interdependence.
60
Development
Process of increasing people's living standard and wellbeing over time
61
Developed country
Country with high GDP per capita and developed industry and service sectors
62
Less developed country
Country with developing economy that has lower GDP per capita, lower levels of industrialisation and weaker indicators of wellbeing.

Economics Definitions (2 decks)

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