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Flashcards in Macro definitions Deck (33)
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1
Q

what is net national product?

A

(difference between GDP and GNP) the value of output produced by productive factors owned by the residents of the country, irrespective of whether they are located within the country or abroad, over one year, and after adjustment for depreciation

2
Q

what is purchasing power parity?

A

an exchange rate derived from relative price levels, such that the prices of similar G&S in different countries are the same when measured in the same currency

3
Q

what is standard of living?

A

the bundle of G&S available for the typical citizen in one year

4
Q

what is GNP?

A
includes:
- an index for life expectancy
- an index for school enrolment and adult literacy
- an index for GDP per capita (in PPP)
-
5
Q

what is measurable economic welfare?

A

an alternative to crude GDP. It includes:

  • GDP&NNP
  • adds allowance for leisure, non-marketed G&S like households, underground activities
6
Q

what is economic growth?

A

an increase in the real output of an economy

7
Q

what is actual growth?

A

the increase in real output that has already been experienced by an economy

8
Q

what it potential growth?

A

the increase in an economy’s productive capacity

9
Q

what is productivity?

A

the amount of output that can be produced from a unit of given input

10
Q

what is entrepreneurship?

A

the development of new business opportunities and the bearing of business risk

11
Q

what is unemployment?

A

where there are people actively seeking work but are unable to find work or unwilling to accept work available

12
Q

what is the labour force?

A

all people within a country who are economically active (either working or seeking work)

13
Q

what is demand deficient unemployment/ cyclical unemployment?

A

when AD is insufficient to generate enough production to employ the entire labour force

14
Q

what are demand-side policies?

A

policy measures used by the government to effect desired changes in AD in the economy

15
Q

what is fiscal policy?

A

govt manipulation of its budgets to influence economic activity by controlling AD

16
Q

what is monetary policy?

A

control of money supply and interest rate in a county to achieve macroeconomic objectives

17
Q

what are supply-side policies?

A

policy measures to impact on AS. eg. to increase resource base, resource mobility and increase technology level

18
Q

what is aggregate expenditure?

A

the total of all planned expenditure on domestically produced G&S in the economy over a period

19
Q

what is investment?

A

the planned net spending by firms on capital goods such as plants, machinery and stock of raw materials

20
Q

what is marginal propensity to consume?

A

proportion of (additional) income that households intend to spend

21
Q

what is govt spending?

A

the current spending by govt

22
Q

what is gross domestic product?

A

the total value of final output produced in a country over one year

23
Q

what is gross national product?

A

the total value of final output by factors of production owned by the residents of the country over a year

24
Q

what is real wage unemployment?

A

when wages are set above the market equilibrium

25
Q

what is structural unemployment?

A

when different industries/regions experience changes in demand or supply conditions

26
Q

what is frictional unemployment?

A

the unemployment that arises when workers are between jobs

27
Q

what is inflation?

A

an increase in the GPL

28
Q

what is deflation?

A

a decrease in the GPL

29
Q

what is disinflation?

A

a falling rate of inflation

30
Q

what is a recession?

A

2 consecutive periods of negative economic growth

31
Q

what is Quantitative Easing?

A

the deliberate increase in money supply on behalf of the govt to buy govt bonds by the central bank of an economy

32
Q

what is the balance of payments?

A

a statement of all intl transactions of a country- usually over a year

33
Q

what is the exchange rate?

A

the price of one currency in terms of another currency