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Economics a level > THEME 2 > Flashcards

THEME 2 Flashcards

definitions (71 cards)

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1
Q

Actual growth

A

economic growth measured by changes in real GDP

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2
Q

AD

A

the total level of demand in an economy at any given price at a moment in time

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3
Q

AS

A

The total amount of output in the economy at any given price at a moment in time

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4
Q

animal spirits

A

the level of confidence of business owners

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5
Q

Balance of payment

A

a record of all financial dealings over a period of time between economic agents of one country and another

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6
Q

boom

A

the peak of business cycle, when growth is high

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7
Q

budget deficit

A

when the gov spends more than it receives

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8
Q

budget surplus

A

when the gov spends less than what they receive

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9
Q

circular flow

A

a model of the economy which shows the flow of goods and services, the factors of production and money around the economy

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10
Q

claimant count

A

A measure of unemployment; the number of people receiving benefits for being unemployed

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11
Q

consumer price index (CPI)

A

official measure used to calculate the rate of inflation, using a weighted basket of goods

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12
Q

cost push inflation

A

inflation caused by a decrease in AS

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13
Q

current account

A

a record of payments for the purchase and sale of goods and services, as well as income and transfers

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14
Q

current account deficit

A

when more money leaves the country than enters, so the current account is negative

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15
Q

current account surplus

A

when more money enters the country than leaves, so the current account is positive

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16
Q

cyclical unemployment

A

unemployment caused by a lack of AD

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17
Q

deflation

A

a persistent fall in prices of goods and services

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18
Q

deflationary policy

A

fiscal or monetary policy which is aimed at reducing AD

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19
Q

demand pull inflation

A

inflation caused by an increase in AD

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20
Q

direct tax

A

taxes paid straight to the gov by the individual tax payer

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21
Q

disinflation

A

a reduction in the rate of inflation

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22
Q

economic growth

A

an increase in the long term productive potential in the economy; an increase in the amount of goods and services produced, measured by an increase in real GDP

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23
Q

expansionary policy

A

fiscal or monetary policy which is aimed to increase AD

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24
Q

export-led growth

A

economic growth arising from an increase in exports

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25
fiscal policy
the use of burrowing, gov spending and taxation to manipulate the level of AD and improve macro performance
26
frictional unemployment
unemployment caused when people move between jobs and enter the job market
27
gross domestic product
GDP - the value of goods and services produced in a country over a given period of time
28
gross investment
investment both to replace old machinery that has depreciated and to create/buy new ones
29
gross national income
GNI - the value of goods and services produced by a country over a period of time plus net overseas interest payments and dividends
30
Gross national product (GNP)
the value of goods and services produced by citizens of a country whether they live in the country or not
31
Inactive
Those neither employed nor unemployed; those not participating in the job market
32
Indirect tax
tax where the person charged with paying the money to the gov is able to pass on the cost to someone else
33
Inflation
A rise in prices of goods and services that erodes the purchasing power of money
34
Injection
spending power entering the circular flow of income resulting from investment, gov spending and exports
35
Interventionist supply side policies
Policies designed to correct market failure, where the gov intervenes in the market
36
Labour force survey
A measure of unemployment which surveys people to class them as unemployed, employed or inactive under the international labour organisation (ILO) definitions
37
Long run aggregate supply
total output an economy can produce when operating at full output
38
long run trend growth rate
the average sustainable rate of econ growth over a period of time
39
marginal propensity to consume
the proportion of an increase in income spent on consumption. change in consumption/change in income
40
Marginal propensity to import
the proportion of an increase in income spent on imports
41
Marginal propensity to save
the proportion of an increase in income that is saved
42
Marginal propensity to tax
the proportion of an increase in income that is taken away in tax
43
Marginal propensity to withdraw
the proportion of an increase in income that is withdrawn from the circular flow
44
market-based supply-side policies
policies which are designed to remove anything which prevents the free market system working efficiently
45
Monetary policy
the attempts of the central bank/regulatory authority to control the level of AD by altering the base interest rates or the amount of money in the economy
46
Multiplier
an increase in injection will lead to an even greater increase of national income
47
National expenditure
the value of spending by households on goods and services
48
National income
the value of income paid by firms to households in return for land, labour, capital and enterprise
49
National output
the value of the flow of goods and services from firms to households
50
Negative output gap
when GDP is lower than predicted; the economy is producing below full output
51
Nominal GDP
GDP which does not take inflation into account; GDP at current prices
52
Output gap
the differences between the long term trend rate of growth and actual growth
53
Positive output gap
when GDP is higher than predicted; the economy is producing above the full output
54
Potential growth
A change in the productive potential of the economy
55
Purchasing power parity
PPP - Exchange rate of one currency to another that compares the cost of living in different countries through comparing a typical basket of goods
56
Quantitative easing
When the central bank buys assets in exchange for money in an attempt to increase the money supply
57
Real wage unemployment
Unemployment caused when wages are set above the equilibrium wage rate
58
Recession
The trough of the business cycle, when growth is low. The gov defines it as where real GDP falls in at least two successive quarters
59
Retail price index
RPI - an old measure of inflation which has lost it national statistic status
60
Seasonal unemployment
Unemployment caused when an industry only operates during certain times of the year
61
Short run Aggregate supply
SRAS - Aggregate supply when at least one factor of production is fixed
62
Short run Phillips curve
shows the relationship between unemployment and inflation: higher levels of unemployment lead to lower levels of inflation
63
Structural unemployment
Unemployment caused by the long-term decline of an industry
64
Supply-side policies
Gov policies aimed at increasing the productive potential of the economy and shifting LRAS to the right
65
Trade (business) cycle
The tendency of economic growth to rise and fall above and below the trend rate of econ growth, causing boom and busts
66
Underemployment
Those who are working part time, on zero contract or on gov training schemes but would prefer to work full time
67
Unemployed
Those who are without work, able to start work in next two weeks and have actively sought work for the last four weeks
68
Value of GDP
Nominal values of GDP; GDP at current prices
69
Volume of GDP
Real values of GDP; the size of the basket of goods
70
Wealth
A stock of assets
71
Withdrawal
spending power leaving the circular flow of income resulting from savings, taxation and imports

Economics a level (3 decks)

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