Module 17 - The macroeconomic environment

Question 1

State the six main macroeconomic objectives

Answer 1

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Question 2

Give examples of macroeconomic policy instruments

Answer 2

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Question 3

Explain how financial well-being of the country can be analysed

Answer 3

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Question 4

Net worth

Answer 4

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Question 5

Consumption of domestically produced goods and services

Answer 5

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Question 6

Net savings

Answer 6

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Question 7

Net taxes

Answer 7

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Question 8

Transfer payments

Answer 8

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Question 9

Imports

Answer 9

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Question 10

Withdrawals

Answer 10

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Question 11

Investment

Answer 11

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Question 12

Government expenditure

Answer 12

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Question 13

Exports

Answer 13

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Question 14

Injections

Answer 14

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Question 15

Aggregate demand

Answer 15

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Question 16

Explain why planned withdrawals need not equal planned injections

Answer 16

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Question 17

Explain the effect of an increase in injections on the main macroeconomic objectives

Answer 17

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Question 18

Value added

Answer 18

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Question 19

Gross domestic product (GDP) at market prices

Answer 19

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Question 20

Gross value added (GVA) at basic prices

Answer 20

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Question 21

Gross national income (GNY) at market prices

Answer 21

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Question 22

Net national income (NNY) at market prices

Answer 22

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Question 23

Households’ disposable income

Answer 23

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Question 24

State the two conditions for equilibrium national income

Answer 24

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Question 25

Explain how equilibrium national income is restored if the economy is not initially at equilibrium

Answer 25

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Question 26

Explain the effect of a change in injections or withdrawals on the equilibrium level of national income

Answer 26

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Question 27

Explain why a change in injections has a multiplier effect on national income

Answer 27

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Question 28

Marginal propensity to consume domestically produced goods and services

Answer 28

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Question 29

The multiplier

Answer 29

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Question 30

The principle of cumulative causation

Answer 30

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Question 31

Actual growth rate

Answer 31

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Question 32

Potential growth rate

Answer 32

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Question 33

Potential output

Answer 33

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Question 34

Full-capacity output

Answer 34

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Question 35

Output gap

Answer 35

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Question 36

Human capital

Answer 36

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Question 37

Knowledge spillovers

Answer 37

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Question 38

Describe the four phases of the business or trade cycle

Answer 38

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Question 39

State the main determinants of the actual growth rate

Answer 39

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Question 40

State the two main determinants of the potential growth rate

Answer 40

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Question 41

Discuss the main factors that contribute to a country's growth

Answer 41

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Question 42

Discuss the policies that a government could introduce to stimulate economic growth

Answer 42

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Question 43

Unemployed

Answer 43

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Question 44

Labour force

Answer 44

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Question 45

Unemployment rate

Answer 45

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Question 46

Standardised unemployment rate

Answer 46

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Question 47

Claimant count

Answer 47

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Question 48

Aggregate demand for labour

Answer 48

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Question 49

Aggregate supply for labour

Answer 49

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Question 50

Equilibrium (or natural) level of unemployment

Answer 50

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Question 51

Disequilibrium unemployment

Answer 51

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Question 52

Frictional (or search) unemployment

Answer 52

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Question 53

Structural unemployment

Answer 53

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Question 54

Technological unemployment

Answer 54

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Question 55

Regional unemployment

Answer 55

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Question 56

Seasonal unemployment

Answer 56

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Question 57

Demand-deficiency (or cyclical) unemployment

Answer 57

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Question 58

Real-wage unemployment

Answer 58

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Question 59

Discuss the main costs of unemployment

Answer 59

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Question 60

Discuss the main causes of unemployment

Answer 60

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Question 61

Discuss possible policies to reduce unemployment

Answer 61

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Question 62

Rate of inflation

Answer 62

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Question 63

GDP deflator

Answer 63

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Question 64

Menu costs

Answer 64

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Question 65

Demand-pull inflation

Answer 65

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Question 66

Cost-push inflation

Answer 66

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Question 67

Distinguish between nominal figures and real figures

Answer 67

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Question 68

Explain the shapes of the AD and AS curves

Answer 68

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Question 69

Discuss the costs and benefits of inflation

Answer 69

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Question 70

Discuss the problems caused by deflation

Answer 70

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Question 71

Discuss the causes of inflation

Answer 71

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Question 72

Discuss the possible policies to reduce inflation

Answer 72

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