Macro1 Flashcards
(18 cards)
Define speculation
Buying something when the price is low and then selling it when it’s expensive making a profit
Define insider training
Where inner knowledge is used to buy a share. This is illeagel
What is Austerity
A programme where the govt cuts public spending
Define primary sector
Farming and agriculture
Define secondary sector
Where the transition from the primary sector occurs turning raw materials into goods and services
Define tertiary sector
The area which provides the actual good or service
Three injections into the economy
Exports
Bank loans
Govt spending
Three withdrawls from the economy
Imports
Taxation
Savings
Define deficit
When people spend more than they earn
Define import
A good or service produced overseas which we consume here
Define export
A good or service produced here which is consumed overseas
How do you work out AD
AD=C+I+G+(X-M)
C= Consumer spending
I= investments
G= Govt spending
X and M= mports
Define nominal economic growth
The nominal economic growth is the % change in GDP from one year to the next
Define inflation rate
The change in price(s) from one year to the next
How do you work out the inflation rate
The % change in price from one year to the next
How do you work out real economic growth
NEG-IR
Define recession
Two consecutive quarters of negative growth
Define AD
The total level of planned real expenditure on UK produced goods and services