Macroeconomy Flashcards
(37 cards)
This is the study of the ‘whole’ economy meaning this encompasses…
aggregate demand and aggregate supply
Aggregate demand in the economy = spending by … + ….
households + injections
Injections are comprised of … (3)
Investment, government expenditure and foreign demand for UK goods
Government has 4 aims for the economy as a whole …
Economic growth NO1
Low Inflation NO2
Low Unemployment NO3
Trade Balance NO4
NO. 1 Gov tries to increase … … long term
economic growth
NO. 1 … output = higher …
higher, incomes
NO. 1 The whole point of economic growth is to…
Raise the standard of living
NO. 1 Actual growth is the increase in national … from one … to the next
output, period
NO. 1 Potential growth is the speed at which the economy could grow if all … are ….
resources are employed
NO. 1 If … growth is lower than … growth we would see unemployment and spare capacity
actual, potential
NO. 1 During a recession the economy is below the … and … is falling
potential, output
NO. 1 IN the long term Gov wants to increase … output
potential
NO. 1 Long term growth underpinned by 2 dimensions…
increase in resource sand efficiency
NO. 1 resources comes from…
natural resources, labour and capital
NO. 1 An increase in the efficiency with which these resources are used, through advances in …, improved … skills or improved …
technology
labour
organisation
NO. 1 For the UK high growth is …-…%
3-4
NO. 1 China and India can grow much faster as they are …
LEDC’s
NO.2 Inflation is the … rise in … over the last …
average
prices
year
NO.2Although prices are … …
generally
rising
NO.2Price rises are measured by the…
CPI / Consumer Price index
NO.2The basket of goods=
collection of food and services used to calculate CPI
NO.2… goods and services in … today there are ….
150,1947,700
NO.2Bread prices have increased …..%
1300
NO.2Problems with above average inflation (3)
Reduces the country’s competitiveness
Reduces the value of savings
Affects certain groups more than others: people on fixed incomes, pensions and savers
