Measures of economic performance

Question 1

What is Microeconomics?

Answer 1

Study of individual markets within an economy.

Question 2

What is Macroeconomics?

Answer 2

Branch of economics that studies how an overall economy behaves.

Question 3

What is Economic Growth?

Answer 3

Measure of how much output has increased by over a 12 month period. Shown as a percentage.

Question 4

What is GDP?

Answer 4

• Gross Domestic Product
• the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period (usually annually)

Question 5

What is a Recession?

Answer 5

• a significant, widespread, and prolonged downturn in economic activity
• typically 2 quarters in a row of a negative GDP growth would mean its a recession

Question 6

What is Unemployment?

Answer 6

• When an individual doesn’t have a job but is actively searching for one

Question 7

What is Inflation?

Answer 7

The continuing and general rise in prices across an economy

Question 8

What is Deflation?

Answer 8

• The general decline in prices for goods and services
• It is typically associated with a contraction in the supply of money and credit in the economy

Question 9

What is the Balance of Payments

Answer 9

-a statement of all transactions made between entities in one country and the rest of the world over a defined period
- summarizes all transactions that a country’s individuals, companies, and government bodies complete with those outside the country

Question 10

What is Balance of Trade?

Answer 10

• part of current account
• records the value of exports and imports
• positive = trade surplus (value of exports greater than imports)
• negative = trade deficit (value of imports greater than exports)