Macro Eonomic Flashcards
What are the 5 economic objectives
Economic growth, price stability, minimising unemployment , stable balance of payments and current account, fair distribution of wealth
In the cirlcuar flow of income what are examples of injections and withdrawals
Injections : exports, government spending, investment withdrawals : savings, taxes, imports
What is the formula for the multiplier
1/1-mpc
Aggregate demand formula
Consumption + investment +government spending + ( exports-imports )
Examples of injections into the circular flow of income
Government spending , investments , exports
Examples of withdrawl within the circular flow of income
Imports,taxes
What are 4 type of unemployment
Seasonal,frictional,structural,cyclical
What is seasonal unemployment
How the time of your year affects unemployment
What is friction unemployment
Time between switching jobs
What is structural unemployment
Mismatch of skills and job opportunities as the pattern of demand changes in the country
What is cyclical unemployment
Unemployment based on the level of aggregate demand
What are the 2 ways of measuring unemployment
Labour force survey and claims account
How does economic growth conflict balance of payments
Because if economic growth increases their will bear more money in the economy for people to spend.They will spend this on imports, meaning that imports increase and the balance of payments from imports and exports will be unbalanced in the favour of imports.causes the current account to decrease,reducing economic growth.
How does economic growth conflict fair distribution of income and wealth
Because since their is more Money circulating round the economy. The rich get richer and as a result makes unfair distribution
How does Unemployment conflicts price stability
Because you cannot have low unemployment and low price stability at the same time. Low price stability means more spending and the aggregate demand curve shifts to the right, causing inflation to increase
