macroeconomics Flashcards
(16 cards)
what are the macroeconomic objectives
sustainable economic growth
minimise unemployment
stable prices
stable balance of payments on the current account
what is GDP?
gross domestic product is the value of all goods and services produced in an economy in a given time period
what is the productive capacity of an economy?
the value of all goods and services a country can produce if it employs all factors of production
what is long run economic growth?
an increase in the productive capacity of an economy
rightwards shift of lras
what can cause long run economic growth?
increased productivity
increased raw materials
increased labour force
increased availability of technology
what is short term economic growth?
san increase in growth without an increase in productive capacity of an economy, the economy has moved closer to full employment
an increase in aggregate demand
what is unemployment?
describes people without a job that are actively searching for a job and can start within the next two weeks
what is frictional unemployment?
people that are in between jobs
what is seasonal unemployment?
demand for certain employment is higher in certain times of the year
what is technological unemployment?
workers are being replaced with machinery
what is structural unemployment?
caused by a change in the structure of an economy
what is cyclical unemployment?
unemployment caused by a lack of aggregate demand
what is classical unemployment,loyment?
caused by wages being too high for the market to clear
what is geographical immobility?
describes how people struggle to find employment as they can not move from their area due to things such as children in schools and high house prices in other areas
what are the costs of unemployment?
stress and mental health
increase inb dime
less consumer confidence
increase i government expenditure
less in government tax revenue
lower incomes and standards of living
