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Macroeconomics > Measures of economic importance > Flashcards

Measures of economic importance Flashcards

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1
Q

what are the factors of production

A

Capital
Enterprise
Labour
Land

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2
Q

what are factor incomes

A

Interest
Profits
Wages
Rent

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3
Q

examples of transport payments

A
  • unemployment benefits
  • state pension
  • tax credit
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4
Q

what are the three leakages in the circular flow of income

A

Imports
Taxes
Savings

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5
Q

what are the three injections in the circular flow of income

A

Exports
Government Spending
Investments

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6
Q

what are exports

A

spending by foreigners in goods and services made in the uk

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7
Q

who spends on investment

A

firms

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8
Q

what is GDP

A

the value of all then goods and services produced in an economy

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9
Q

what is the nominal value

A

provides a measure in simple monetary terms

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10
Q

what is the real value

A

this provides a measure where the nominal value has been adjusted for inflation

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11
Q

what is the total

A

provides an overall aggregate total

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12
Q

what does per capita mean

A

divides the total by population

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13
Q

what are some criticisms of GDP

A
  • does not take into consideration health, education and social structure
  • quality of life not measured
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14
Q

what is GNI

A

gross national income - measures income, wages, services and investments generated by the countries citizens

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15
Q

what is GNP

A

gross national product - the market value of all the goods and services produced in one year by labour + property supplied by the citizens of a country

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16
Q

what is HDI

A

human development index - measures a broader definition of well-being and provides a composite measure of 3 basic dimensions of human development

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17
Q

what is GPI

A

genuine progress indicator - takes everything that GDP uses into account but adds other figures that that represent the cost of the negative effects related to economic activity

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18
Q

what is HPI

A

human poverty index - concentrated in the deprecation in the 3 elements of human life

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19
Q

what is the Gini Coefficient

A
  • differences in national income equality around the word
  • between 0 - 1
  • 0 = perfect equality
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20
Q

what is the easterlin paradox

A

states that a point in time happiness values are directly proportional with income but over time the long-term growth rates of happiness and income are not significantly related

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21
Q

what are the two measures of unemployment

A
  • claimant count
  • uk labour force survey
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22
Q

what is the claimant count

A
  • this provides monthly data regarding the number people claiming JSA
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23
Q

what does JSA stand for

A

Job seekers allowance

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24
Q

define unemployment

A

actively seeking employment

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25
conditions of JSA
- attending a session with a ‘work coach’ at a DWP office - must be seeking work - must complete online tasks to prepare for interviews - work a maximum of 16 hours per week - have less than 16,000 in savings
26
what does economically inactive mean
the people are neither employed nor unemployed. they are not seeking work or available to start work. they are not included in unemployment data
27
what does the amount of JSA depend on
the system is a contribution - based, depending on how much National Insurance has been paid by the worker during the previous two years
28
limitations on the claimant count
- stigma attached to claiming benefits - stricter eligibilty
29
what does underemployment mean
workers who may not fully utilise their skill set or the worker may be working fewer hours than they would like
30
what is the concept of hysteresis
current and future value will be impacted by historical events
31
how does hysteresis work when applied to unemployment
the longer somebody is unemployed, the harder it is for them to find work
32
what are the 6 types of unemployment
1. frictional 2. cyclical 3. structural 4. natural 5. seasonal 6. real wage
33
what is frictional unemployment
unemployment caused by individuals searching for work, or waiting to start a new job
34
what is cyclical unemployment
unemployment caused by changes in the business cycle. labour is a form of derived demand therefore is there is a recession and demand for goods and services fall there will be a fall in demand for labour
35
what is structural unemployment
combination of occupational and geographical immobility of labour. caused by changes in the structure of an economy
36
what is natural unemployment
combination of frictional and structural unemployment. it is the lowest level of unemployment a health economy can sustain without causing inflation
37
what is seasonal unemployment
temporary work that is created and then lost when there is change in seqsons
38
what is real wage unemployment
occurs when real wages are too high
39
what is the labour force survey unemployment count
- a person aged 15 or over without a job during a given week - available to start a job within the next two weeks or actively having sought employment during the last 4 weeks
40
what are the 4 components of the balance of payments
1. current account 2. financial account 3. capital account 4: net errors + omissions (balancing tools)
41
what are the 4 components of the current account
1. trade in goods 2. trade in services 3. investment income 4. transfers
42
what are the three components of the financial account
1. portfolio investment 2. foreign direct investment 3. reserve
43
name three examples of portfolio investment
- bonds - derivatives - shares
44
examples of a reserve
- gold - currency
45
what components make up the trade balance of the current account
1. trade in goods 2. trade in services
46
what components make up the income balance of the current account
1. investment income 2. transfers
47
what is a current account deficit
value of M > value of X
48
what is a financial account deficit
spend more in portfolio investment in foreign countries than their own
49
what is a current account surplus
value of M < value of X
50
what is a financial account surplus
spend more in portfolio investment in their own country rather than foreign countries
51
reasons for a current account surplus
- low valued exchange rate - competitiveness - high domestic saving ratio - protectionism - foreign direct investment
52
why does a low values exchange rate cause a CA surplus
exports are more price competitive
53
why does competitiveness cause a CA surplus
low unit labour costs from high productivity means lower prices. dynamic efficiency would mean higher quality
54
why does a high domestic saving ratio cause a CA surplus
increased saving of people wi mean less demand for imports. if MPM is low then a current account surplus in more likely
55
why does protectionism cause a CA surplus
tariffs, quotes and regulations may reduce the levels of imports
56
why does foreign direct investment cause a CA surplus
foreign companies invest in a country and then export to the rest of the world. inflow to FA - profits being sent back to the country of origin would be CA outflow
57
reasons why a financial deficit isn’t always bad
- if the exchange rate is weak: CA deficit can self-correct itself into a surplus - if defective is caused by an increase in imports, the supply of the currency will increase - leads to an increase in exports therefore self-correcting the CA deficit into a surplus
58
describe the J curve
59
what does the j curve depend on
if the marshall-lerner condition is true
60
what is the marshall- lerner condition
PED of X + M > 1

Macroeconomics (12 decks)

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