macroeconomics objectives vocab

Question 1

macroeconomics

Answer 1

the study of the economy as a whole

Question 2

economic indicator

Answer 2

a quantitative measure of economic performance e.g. unemployment, inflation etc

Question 3

economic growth

Answer 3

the increase in an economy’s output over time

Question 4

inflation

Answer 4

a sustained rise in the average price level

Question 5

unemployment

Answer 5

a situation where people are out of work but are actively seeking work/willing to and be able to work

Question 6

the balance of payments

Answer 6

a record of all an economy’s financial transactions with the rest of the world

Question 7

economic stability

Answer 7

the avoidance of volatility in the main macroeconomic indicators such as unemployment rates, growth rates, inflation rates and exchange rates

Question 8

gdp

Answer 8

the value of the total output produced in an economy over a given time period

Question 9

trade surplus

Answer 9

exports are greater than imports

Question 10

trade deficit

Answer 10

imports are greater than exports

Question 11

unemployment rate

Answer 11

those who are out of work, but are actively seeking work as a percentage of workforce/economically active

Question 12

population of working age

Answer 12

men and women between 16-64

Question 13

labour force/work force/economically active

Answer 13

those who are in work or actively seeking work (employed + unemployed)

Question 14

economically inactive

Answer 14

people of working age who choose not to work or can’t work e.g. people in education/looking after children

Question 15

labour force participation rate

Answer 15

the percentage of the population of working age who are economically active

Question 16

long term unemployment

Answer 16

percentage of unemployed who have been out of work for more than a year

Question 17

gnp

Answer 17

the money evaluation. of income accuracy going to a nations citizens irrespective of the location of the factors of production that generated it. usually measure over one year = gdp + net property income from abroad

Question 18

inflation rate

Answer 18

the percentage change in the average price level over a period of time - usually one year

Question 19

purchasing power

Answer 19

the amount of goods and services that can be bought with a given amount of money

Question 20

deflation

Answer 20

a sustained fall in the average price level

Question 21

consumer price index CPI

Answer 21

a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services

Question 22

sustainable economic growth

Answer 22

occurs when the needs of the current generation are met, without compromising the ability of future generations to meet their own needs

Question 23

sustained economic growth

Answer 23

a continued and steady increase in output - to achieve sustained growth - both potential and actual growth must occur simultaneously

Question 24

national income

Answer 24

the monetary evaluation of the total output produced in country within a time period, usually a year

Question 25

national wealth

Answer 25

monetary evaluation of the stock of money and goods that a nations citizens own - at a point in time

Question 26

potential growth

Answer 26

occurs when there is an increase in the productive capacity of the economy

Question 27

actual growth

Answer 27

occurs when an economy produces more goods and services

Question 28

transfer payment

Answer 28

occurs when money changes hands without an economic activity lacking place

Question 29

output gap

Answer 29

occurs when the output of an economy is below potential output

Question 30

gdp per capita

Answer 30

gdp/population gdp per head of population

Question 31

real gdp

Answer 31

the total value of an economy’s output in a time period adjusted to take inflation into account

Question 32

nominal gdp

Answer 32

the total value of an economy’s output in a time period measured using the prices of that time period

Question 33

living standards

Answer 33

the quality of life that individuals experience in a country

Question 34

black economy

Answer 34

unrecorded and illegal economic activity

Question 35

balance of payments surplus

Answer 35

inflows greater than outflows

Question 36

balance of payments deficit

Answer 36

outflows greater than inflows

Question 37

multinational company MNC

Answer 37

a firm that has a base of operations in more than one country

Question 38

disinflation

Answer 38

the rate at which the average price level is rising has slowed down

Question 39

positive relationship

Answer 39

occurs when 2 variables move in the same direction

Question 40

negative relationship

Answer 40

occurs when 2 variables move in opposite directions

Question 41

consumption expenditure C

Answer 41

expenditure by consumers in goods and services

Question 42

investment expenditure I

Answer 42

expenditure by firms on new machinery and other capital goods

Question 43

government expenditure G

Answer 43

expenditure by the government on the provision of goods and services

Question 44

export expenditure X

Answer 44

expenditure by foreign individuals and organisations on domestic goods and services

Question 45

import expenditure

Answer 45

expenditure by domestic individuals and organisations on foreign goods and services

Question 46

net exports X-M

Answer 46

export expenditure minus import expenditure

Question 47

circular flow of income

Answer 47

an economic model that illustrates the flow of money, goods, services from households is firms in an economy