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Economic Key Defintions (Year 12) > Macroeconomics (theme 2) > Flashcards

Macroeconomics (theme 2) Flashcards

1
Q

Actual growth

A

Economic growth measures by changes in real GDP

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2
Q

Aggregate demand (AD)

A

The total level of demand in an economy at any given price at a moment in time

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3
Q

Aggregate supply (AS)

A

The total amount of output in the economy at any given price at a moment in time

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4
Q

Animals spirits

A

The level of confidence of business owners

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5
Q

Balance of payments

A

A record of all financial dealings ovens a period of time between economics agents of one country and another.

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6
Q

Base year

A

A year chosen as a good comparison in series of data when given an index

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7
Q

Boom

A

The peak of the business cycle, when growth is high

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8
Q

Budget

A

Where the govern,ent lays out their spending and taxation plans

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9
Q

Budget deficit

A

When the government spends more money that it receives

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10
Q

Budget surplus

A

When the government receive more money that it spends

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11
Q

Circular flow

A

A model of the economy which shows the flow of goods and services, the factors of production and money around the economy.

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12
Q

Claimant count

A

The number of people received benefits from being unemployed

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13
Q

Consumer price index (CPI)

A

Offices measure used to calculate the rate of inflation, using a weighted basked of goods.

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14
Q

Consumption

A

Consumer spending on goods and services

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15
Q

Cost push inflation

A

Inflation caused by a decrease in AS

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16
Q

Current account

A

A record of the payments for the purchase and sale of goods and services, as well as income and transfers.

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17
Q

Current account defecit

A

When more money leaves the country than enters, so the current account is negative.

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18
Q

Current account surplus

A

When more money enters the country than leaves, so the current account is positive

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19
Q

Cyclical unemployment

A

Unemployment caused by a lack of AD

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20
Q

Deflation

A

A persistent fall in price of goods and services

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21
Q

Deflationary policy

A

Fiscal or monetary policy which is aimed at reducing AD

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22
Q

Demand pull inflation

A

Inflation caused by an increase in AD

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23
Q

Deprecation

A

The reduction in value of machinery overtime

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24
Q

Direct tax

A

Taxes paid straight to the government by individual taxpayer.

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25
Q

Disinflation

A

A reduction in the rate of inflation

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26
Q

Disposable income

A

They money consumers have left to spend after tax.

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27
Q

Economics growth

A

An increase in the long term productive potential in the economy.
Measure by an increase in real GDP

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28
Q

Employed

A

So some who does more than 1 hour of paid woke a weeks.

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29
Q

Expansionary policy

A

Fiscal or monetary policy which is aimed at increasing AD

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30
Q

Exports

A

Goods or services sold to foreigners that bring income to the county.

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31
Q

Export-Les growth

A

Economic growth arising from an increase in exports

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32
Q

Fiscal policy

A

The use of borrowing, government spending and taxation to manipulate the level of AS and improve macroeconomic performance.

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33
Q

Frictional unemployment

A

Unemployment caused when people move between jobs and enter the job market.

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34
Q

GDP

A

The value of goods and services produced in a county over a given period of time.

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35
Q

GDP per capita

A

Total GDP divided by the population

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36
Q

Gross investment

A

Investment both to replace old machinery that has depreciated and to buy new ones.

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37
Q

Gross national income (GNI)

A

The value of goods and services produced by a country over a period of time plus net overseas interest payments and dividends.

38
Q

Gross national products (GNP)

A

The value of goods and species produced by citizens of a country.

39
Q

Government spending

A

Spending by the government for the provision of goods and services

40
Q

Imports

A

Goods and services bought from foreigners that takes income out of the country.

41
Q

Inactive

A

Those neither employed nor unemployed.

42
Q

Income

A

A flow of assets

43
Q

Index number

A

Numbers allowing accurate comparisons over time to be made

44
Q

Indirect tax

A

Tax where the person charged with paying the money to the government is able to pass on the cost to someone else

45
Q

Inflation

A

The general rise if prices of goods and services that eroded the purchasing power of money.

46
Q

Injection

A

Spending power entering the circular flow of income. (Investment, government spending or exports).

47
Q

Investment

A

Spending by businesses in capital goods, which leads to the creation of real goods.

48
Q

Labour force survey

A

A measure of unemployment which surveys people to class them as unemployed, employed or inactive.

49
Q

Living standards

A

The quality of life enjoyed by people in a country

50
Q

Long run

A

When all factors of production are variable

51
Q

LRAS

A

The total output of an economy can produce when operating at full output.

52
Q

Long run trend growth rate

A

The average sustainable rate of economics growth over a period of time.

53
Q

Marginal propensity to import

A

The proportion of an increase in income spends on imports.

54
Q

Marginal propensity to save

A

The proportion of an increase in income that is saved

55
Q

Marginal propensity to tax

A

The proportion of an increase in income that is taken away in tax

56
Q

Marginal propensity to withdraw

A

The proportion of an increase in income that is withdrawn from the circular flow

57
Q

Market-based supply-side policies

A

Policies which are designed to remove anything which prevents the free marketer system working efficiently.

58
Q

Monetary policy

A

The attempts of the central bank to control the level of AD by altering base interests stem or the amount of money in the economy.

59
Q

Multiplier

A

An increase in an injection will lead to an even greater increase of national income.
1/(1-MPC).

60
Q

National expenditure

A

The value of spending by households on goods and services.

61
Q

National income

A

The value of income paid by firms to households in return for factors of production.

62
Q

National output

A

The value of the flow of goods and services from firms to households.

63
Q

Negative output gap

A

When GDP is lower than predicted. (Economy is producing below full output).

64
Q

Net exports

A

Exports minus imports

65
Q

Net investment

A

Investment adjusted for depreciation, gross investment minus depreciation.

66
Q

Nominal GDP

A

GDP which does not take inflation into account.

67
Q

Output gap

A

The difference between the king term trend growth and actual growth.

68
Q

Positive output gap

A

When GDP is higher than predicted. (The economy is producing above full output).

69
Q

Potential growth

A

A change in the productive potential of the economy.

70
Q

Purchasing power parity

A

Exchange rate of one currency to another that compares the cost of living in different countries through comparing a typical basket of goods

71
Q

Quantitative easing

A

When the central banks buy assessed in exchange for money in an attempt to increase the money supply.

72
Q

Real GDP

A

GDP which strips out the effect of inflation.

73
Q

Real wage unemployment

A

Unemployment caused when wages are set above the equilibrium wage rate.

74
Q

Recession

A

The trough of the business cycle, when growth is low.

75
Q

Retail price index (RPI).

A

An old measure of inflation which had lost its national statistic status

76
Q

Savings

A

The decision by consumers to postpone consumption.

77
Q

Seasonal unemployment

A

Unemployment caused when an industry only operates during certain times of the year

78
Q

Short run

A

When at least one factor of production is fixed

79
Q

SRAS

A

Aggregate supply when at least one factor of production is fixed.

80
Q

Short run Phillips curve

A

Shows the relationship between unemployment and inflation.

81
Q

Structural unemployment

A

Unemployment caused by the long-term decline of an industry

82
Q

Supply-side policies

A

Government policies aimed at increasing the production potential of the economy and shifting LRAS to the right.

83
Q

Total GDP

A

The GDP as a whole country

84
Q

Trade cycle

A

The tendency of economic growth to rise and fall above and below the trend rate of economic growth.

85
Q

Underemployment

A

Those who would like not work full time but are not.

86
Q

Unemployed

A

Those who are without work but have been actively seeking for it

87
Q

Value of GDP

A

GDP at current prices

88
Q

Volume of GDP

A

The size of the basket of goods.

89
Q

Wealth

A

A stock of assets

90
Q

Withdrawal

A

Spending power leaving the circular flow of income. (Savings, taxation and imports.)

Economic Key Defintions (Year 12) (2 decks)

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