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Economics > Theme 2 Definitions > Flashcards

Theme 2 Definitions Flashcards

(83 cards)

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1
Q

What does economic growth mean?

A

The rate of GDP of a country changes over a year

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2
Q

What does gross domestic product (GDP) mean?

A

The value of all goods and services produced within a country in a year

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3
Q

What does real GDP mean?

A

The measure of value added through the production of goods and services in a country during a period (adjusted for inflation)

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4
Q

What does nominal GDP mean?

A

The total market value of all goods and services produced in a country’s economy over a given period

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5
Q

What does growth mean?

A

When the uk is making more goods and services

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6
Q

What does boom mean?

A

When the uk is making lots more goods and services

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7
Q

What does slump mean?

A

When the economy is slowing down

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8
Q

What does recession mean?

A

When the amount of goods and services the uk makes goes into negative figures

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9
Q

What does frictional unemployment mean?

A

Out of work due to personal short term unemployment

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10
Q

What does structural unemployment mean?

A

Your skills are no longer relevant

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11
Q

What does seasonal unemployment mean?

A

Parts of the year when there is no work in your job

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12
Q

What does cyclical unemployment
mean?

A

Unemployment due to economic reasons

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13
Q

What does claimant count mean?

A

Records the number of people claiming unemployment related benefits

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14
Q

What does the labour force survey mean?

A

A study of the employment circumstances of the UK population

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15
Q

What does the balance of payments mean?

A

Record of all transactions that the UK makes with the rest of the world

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16
Q

What does imports mean?

A

A good/service brought to this country from another country

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17
Q

What does exports mean?

A

A good/service brought to another country from this country

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18
Q

What does visible trade mean?

A

A good which you can see

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19
Q

What does invisible trade mean?

A

A service which you can’t see

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20
Q

What does inflation mean?

A

Increase in prices

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21
Q

What does demand pull inflation mean?

A

When demand for goods and services exceeds the available supply of those goods and services in the economy

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22
Q

What does coat push inflation mean?

A

Inflation that results from higher production costs and rising prices of raw materials

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23
Q

What does consumer price index mean?

A

Measures the average change in prices paid by consumers over time

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24
Q

What does retail price index mean?

A

The rate at which prices for goods and services are rising

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25
What does deflation mean?
Decrease in prices
26
What does the Phillips curve mean?
Less unemployment leads to higher inflation (and vice versa)
27
What does economic sustainability mean?
Growing the economy, using natural resources, but without diminishing resources for the future
28
What does the circular flow of income mean?
The money moving through the economy
29
What does withdrawals mean?
Variables in the economy that leak out the circular flow of income, and reduce the size of national income
30
What does injections mean?
When funds added to the circular flow of income
31
What does aggregate demand mean?
The total expenditure on a country's goods and services produced within an economy each time period
32
What does consumption mean?
What we buy everyday
33
What does disposable income mean?
The amount of money a person has left to spend after all taxes are deducted from gross income
34
What does gross income mean?
An individuals total earnings throughout a given period before any deductions are made
35
What does discretionary income mean?
The amount of income left after taxes and personal necessities have been payed
36
What does marginal propensity to consume mean?
The amount of additional income that we spend
37
What does marginal propensity to save mean?
The amount of additional income that we save
38
What does the wealth effect mean?
As assets increase in value, spending increases
39
What does investments mean?
The production of goods that will be used to produce other goods
40
What does gross investment mean?
The total amount that an economy spends on new capital
41
What does net investments mean?
The total amount of money that a company spends on capital assets, minus the depreciation of those assets
42
What does accelerator effect mean?
When an increase in GDP results in a larger rise in capital investment spending
43
What does output gap mean?
The difference between the actual level of GDP and its estimated potential value
44
What does positive output gap mean?
A situation where an economy is actual above its potential value
45
What does negative output gap mean?
A situation where an economy is actual below its potential value
46
What does trade balance mean?
The difference between the value of exports and imports
47
What does exchange rate system mean?
Rate of which one currency can be exchanged for another currency
48
What does free floating exchange rate mean?
When exchange rates are determined by demand and supply
49
What does fixed exchange rate mean?
When exchange rate is pegged to another major currency/basket of currencies
50
What does multiplier effect mean?
Where an initial change in spending leads to bigger change in total output
51
What does positive multiplier effect mean?
When an initial increase in injection leads to a greater final increase in level of real GDP
52
What does negative multiplier effect mean?
When an initial increase in withdrawals leads to a greater final decrease in level of real GDP
53
What does aggregate supply mean?
Total output of goods and services that firms in an economy are willing and able to supply at a given price level
54
What does short run aggregate supply (SRAS) mean?
The relationship between GDP and general price level (once factor of production is fixed)
55
What does long run aggregate supply (LRAS) mean?
Maximum output when all factors of production are fully and efficiently used
56
What does supply shocks mean?
An unexpected event that suddenly changes the supply of a product or commodity
57
What does Keynesian aggregate supply curve mean?
When spare capacity is high, aggregate supply will elastic
58
What does fiscal policy mean?
Tax and government spending goes in opposite directions
59
What does expansionary/lose fiscal policy mean?
When government spending goes up and taxes goes down
60
What does contractionary/tight/deflationary fiscal policy mean?
When government spending goes down and taxes goes up
61
What does monetary policy mean?
Controlling the money supply
62
What does monetary policy transmission mechanisms mean?
Changes of interest rates influence aggregate demand, output and prices
63
What does lose monetary policy mean?
Aims to stimulate an economy by lowering interest rates
64
What does tight monetary policy mean?
Aims to control inflation by raising the interest rates and reducing the money supply
65
What does supply side policies mean?
Policies that aim to increase productivity and efficiency in the economy
66
What does interventionist policies mean?
Policies that require the government intervention to boost the economy
67
What does market policies mean?
Regulations implemented to control the production and consumption of goods
68
What does quantitative easing mean?
Way of increasing the money supply and aims to prevent deflation during a recession
69
What does quantitative tightening mean?
Decreasing the amount of money in the money supply in the economy
70
What does gross national product (GNP/GNI) mean?
The total value of goods produced and services provided by a country during one year
71
What does trade unions mean?
An organized association of workers in a profession, it seeks to protect workers pays and rights
72
What does collective bargaining mean?
The process in which working people negotiate contracts with their employers to determine their terms of employment
73
What does industrial action mean?
When employees take action against their employers because of a work dispute
74
What does 'holding a ballot' mean?
Union must have a vote that's properly organized according to legal rules
75
What does disinflation mean?
Price are still rising but at a slower pace
76
What does privatization mean?
Selling an industry to a private sector
77
What does deregulation mean?
Opening up a state monopoly
78
What does trend growth mean?
Average sustainable rate of economic growth over time
79
What does red tape mean?
Official rules and processes that seem unnecessary and cause delays
80
What does competitiveness mean?
When our economy can produce more products of better quality and as cost effective as other countries
81
What does stagflation mean?
High unemployment leads to high inflation
82
What does labour immobility mean?
The difficulties that prevent workers from moving to jobs that offer the highest wages or where their skills are most in demand
83
What does profit margin mean?
The amount by which revenue from sales exceeds costs in a business

Economics (10 decks)

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