MACROECONOMICS Flashcards
What is consumer confidence?
How average individuals feel about their current and future situation
What is a tariff?
Tax placed on an imported good into a country
What happens to the AD curve when AD rises?
AD shifts to the right
What is debt (govt debt)?
The accumulation of previous deficits
What are the 3 ways of funding the budget deficit?
- Borrowing (bonds)
- sell govt assets
- Use surplus from previous years
What is the aggregate demand curve?
Shows the level of planned demand for real output consistent with a price level
How do imports affect AD?
- Transport costs
- Protectionism
- stage of econ cycle locally
- quota
How do exports affect AD?
- Stage of the econ cycle abroad
- tariffs
How does business spending affect AD?
- spare capacity in the economy
- interest rates
- Corporation tax rates
- employment levels
How does government spending affect AD?
- unemployment levels
- Tax revenue
- population growth
How does consumption affect AD?
- Interest rates
- income levels
- consumer confidence
- stage of econ cycle
- income tax rates
What are the 3 ways of measuring national income?
Income, expenditure, output
What is skimpflation?
When a company uses less expensive materials but maintains the same price
What are the stages of the economic trade cycle?
Downturn, recession, recovery, peak/boom
What are the factors for production?
Land, labour, enterprise, capital
What is the income method?
Wages
Interest
Rent
Profits/dividends
What is the AD formula?
AD = C + I + G + (X-M)
What is GDP?
Per capita?
Value of total output in a year
Divided by the population
What is another term for total spending?
Aggregate Demand
What are the 3 injections?
Government spending
Exports
Bank loans/investment
What is nominal economic growth?
The percentage increase in GDP from one year to the next
What is the expenditure method?
Government spending
Consumption
Investment spending
Net exports
What is the real economic growth calculation?
Nominal - inflation
What are the 3 withdrawals?
Taxation
Savings
Imports
