Macroeconomics Flashcards
learn key words and definitions (19 cards)
What are “Index Numbers”?
Index Numbers are a system used to simplify COMPARISONS between years.
How do you construct an “Index Number”?
To construct index numbers you must first choose a base year to compare the other years to and set the index number to 100. From then on you work out the % increase and add it to the base year to get the index number of that year.
What is “Price”?
Price is how much a product is sold or on the market.
What is “Value”?
Value is how much something is worth.
What is “Cost”?
Cost is how much was spent on producing that product .
What does “GDP” stand for?
GDP stands or gross domestic product.
What does “GDP” mean ?
GDP is the total value of goods produced and services provided in a country during one year, disregarding of all equipment used.
What is “Wealth”?
Wealth is a STOCK CONCEPT. Wealth is the value of all your assets E.g a property you own, or a savings account.
What is “Income”?
Income is a FLOW CONCEPT. Income flows from your wealth E.g rent from a property, or interest from your savings.
What are “Economic Agents”?
All the participants in an economy
Who are the “Economic Agents”
1) Consumers
2) Firms
3) Governments
What are “Injections” in a circular flow economy?
1) Government spending
2) Exports
3) Investments
What are “Leakages” in a circular flow economy?
1) Tax
2) Imports
3) Savings
What are the 3 methods of working out GDP called?
1) National Output
2) National Expenditure
3) National Income
What does “GNP” stand for?
Gross national product
What is the difference between “GNP” and “GDP”?
The difference between GNP and gross domestic product (GDP) is that GNP includes the value of products made by a country’s citizens and companies abroad, while GDP only accounts for products made within a country’s borders.
What is “GNP”
GNP is the total value of goods produced and services provided by a country during one year, equal to the gross domestic product plus the net income from foreign investments.
How do you calculate GNP?
GNP = GDP + Net income from foreign investors
Define diminishing marginal utility
decline in the additional satisfaction a person derives
from consuming an additional unit of that product.
