paper 2 - topic 3 economic peformance

Question 1

short run economic growth

Answer 1

growth based on increased utilisation of unemployed resources

Question 2

long run economic growth

Answer 2

growth based on increasing the potential output level of an economy

Question 3

economically inactive

Answer 3

those of working age who arnt in work and arnt looking for work

Question 4

trend growth

Answer 4

the rate of growth in the LRAS over time, representing the maximum potential capacity of the UK economy

Question 5

economic cycle

Answer 5

the economic cycle refuses to the repeated partern of fluctuatinions in the short run economic growth and how it differs from the trend growth of the economy

Question 6

boom

Answer 6

period of above average short run economic growth

Question 7

downturn

Answer 7

period here short run economic growth falls from above the average to below the average

Question 8

recession

Answer 8

two successive quarters of a year where short run economic growth is negative

Question 9

recovery

Answer 9

when the short run economic growth starts to increase after recession

Question 10

output gap

Answer 10

the difference between actual growth and trend growth

Question 11

economic shocks

Answer 11

sudden unexpected events that will effect the macroeconmey, especially the growth rate

Question 12

demand side shocks -

Answer 12

unexpected changes and significant changes in the Level of aggregate demand

Question 13

supply side shocks

Answer 13

unexpected and significant changes the price of factors of production or the availability

Question 14

full unemployment

Answer 14

the level of unemployment where those who are economically inactive are not counted, the people who are able and willing to work can

Question 15

cyclical employment

Answer 15

unemployment caused by infufficant aggregate demand within an economy

Question 16

frictional unemployment

Answer 16

unemployment caused bu the movement between jobs

Question 17

structural unemployment

Answer 17

mismatch between the labour supply abaaliabvle and the labour demand for differently skilled labour, the lack of transferable skills

Question 18

deflation

Answer 18

a fall in the average price level over time

Question 19

disinflation

Answer 19

where the rate of inflation is falling but still positive

Question 20

demand pull inflation

Answer 20

inflation caused by excessively high levels of aggregate demand beyond that needed to generate full employment

Question 21

cost push inflation

Answer 21

inflation that occurs due to the rising in the cost fo production incurred by firms

Question 22

commodity

Question 23

commodity

Answer 23

a homogenous product (all output of the product is identical) that is often used used as basic inputs into production. common examples are oil, copper cotton and basic food stuffs.

Question 24

open economy

Answer 24

an economy in which foreign trade accounts for a significant proportion of GDP

Question 25

Primary income

Answer 25

flows of income from investment abroad less flows of income from forign investments located in the UK

Question 26

secondary income

Answer 26

transfures of money received in the UK from abroud