Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Economics - Macro > RST BOOK > Flashcards

RST BOOK Flashcards

(49 cards)

Start Studying
1
Q

What are the Economic policies/ indicators?

A
  • Economic growth
  • inflation
  • unemployment
  • interest rates
  • exchange rates
  • balance of payments
  • debt
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Give examples of injections that come into the economy?

A
  • exports
  • investment
  • government
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Examples of withdrawals from an economy?

A

Imports
Taxes
Save

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is true if injections are bigger than withdrawals?

A

Economic growth and vice versa

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

3 ways that we measure the amount of economic activity going on?

A
  • Output method - measure the value of output produced by firms
  • Expenditure Method - Measure the total expenditure of consumers
  • National Income - Measure of the total income for all firms
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What does the circular flow show us?

A

Money is flowing around and the amount changes due to injections and withdrawals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the three government policies?

A

Monetary
Fiscal
Supply side

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define a policy

A

A strategy used to achieve certain objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the fiscal policy?

A

Government spending & taxation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is monetary policy?

A

Influence the money supply - government uses interest rates to influence the supply of money

  • credit availability (how much you can borrow)
  • Quantitative easing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Why do we measure the economy?

A 
Forecasts 
Record total output
Comparisons 
Plan
Identify problems
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Why are our figures sometimes inaccurate?

A
  • unrecorded transactions
  • black market
  • difficult to put a value on some good / services
  • accuracies Of reported figures
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is Aggregate Demand?

A

Total spending on goods & services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the Aggregate Demand formula?

A

AD = C + I + G + (X-M)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What does C stand for?

A 
Consumer expenditure on goods and services 
Includes durables (can use over and over again) and non-durables eg food and drink
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is Income?

A

Is wha you get paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is Disposable Income?

A

Is income in your bank after tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is discretionary income?

A

Is money you spend at your own choice (excluding rent,car insurance etc)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the Keynes factors that affect consumption?

A
  • income
  • distribution of Income
  • wealth affect
  • change in expectations
  • demographic factors
  • level of unemployment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Keynes factors that affect consumption - income

Study These Flashcards
A

As income rises or falls, consumptions and spending also rises and falls

21
Q

Keynes factors that affect consumption - Distribution of income

Study These Flashcards
A

Inequality of income

22
Q

Keynes factors that affect consumption - wealth affect

Study These Flashcards
A

Is the Change in spending that accompanies a change in perceived wealth

23
Q

Keynes factors that affect consumption - changes in expectations

Study These Flashcards
A

Individuals may rush to purchase goods in excess of current needs if they expect a war or fear a shortage

24
Q

Keynes factors that affect consumption - demographic factors

Study These Flashcards
A

Large families spend more than small families and demographic changes like age sex occur over a long period.

25
Keynes factors that affect consumption - level of unemployment
The more people there are receiving a steady income, the more people there are to make discretionary spending choices
26
What is the Marginal Propensity to Consume?
How much additional income people are willing to consume
27
What is the Marginal Propensity to Consume equation?
MPC = change is consumed / change in income
28
What is the change in consumption called?
Average propensity to consume
29
What is capital investment?
Firms buying machines to produce finished goods
30
How much of GDP does investment count for?
15-20%
31
What is depreciation?
Drop in value of a product that is old and used
32
What factors affect investment levels?
- interest rates (cost of borrowing) - Economic Growth (changes in demand) - confidence / expectations - technological developments (productivity of capital) - availability of finance from banks
33
What is the accelerator theory?
States that investment is related to the rate of change of GDP
34
Example of accelerator theory
- Increase in consumer demand - Firms get close to full capacity - firms invest to meet rising demand
35
What is the negative accelerator?
We’re a decline in growth leads to a decline in companies investment
36
What is the affect on companies if there is lower corporation tax?
Companies have a larger incentive to invest
37
What factors affect investment?
Retaining profit affect investment Government policy affects investment Government spending & taxation affects investment Rate of inflation RISK - Higher risk lower level of investment
38
Where does the government get it’s money from?
Business rates £30 bn | National Insurance £334 billion
39
How much is government spending to GDP?
Government spending is 50% of GDP
40
What are the three types of Government payments?
- Welfare spending (transfer payments) - public services (recurring spending - state investment (investment projects)
41
What is the current government spending on public services?
- Salaries of NHS employees - Drugs used in healthcare - Road maintenance project
42
Government spending on Capital? (New public infrastructure)
- construction of new motorways and bridges - new equipment in the NHS - Flood defence schemes
43
What is the size of the multiplier If an investment of £10 million grows the economy to £100million?
10x
44
How can government spending affect incomes?
- Welfare State Transfer (benefits) - Universal Child Benefits / Unemployment benefits - Public State Pension - Conditional Welfare Transfers
45
What are some state provided services?
- education - reduces in equality of market incomes - Health Care - social housing - employment training
46
What are the UK’s major trade partners)
- Germany - US - China
47
What are the UK’s main imports?
- Machinery ($82.5 billion) - Vehicles ($72.8 billion) - Mineral Fuels ($51.8 billion)
48
What are imports?
Are products that are brought into a country from another
49
What is the Balance of Payments?
Records all financial transactions made between consumer, businesses and the government on one country with others.

Economics - Macro (27 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions