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Econ K > Theme 2 pmt > Flashcards

Theme 2 pmt Flashcards

(97 cards)

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1
Q

actual growth

A

Economic growth measured by changes in GDP

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2
Q

aggregate demand (AD)

A

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

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3
Q

aggregate supply AS

A

the total amount of output in an economy at any given price at any given 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 payments

A

the difference in total value between payments into and out of a country over a period.

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6
Q

base year

A

the starting point used when constructing an index number series

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7
Q

boom

A

the peak of the business cycle when growth is high

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8
Q

budget

A

a plan on a government’s or individual’s income and spending over a specific period

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9
Q

budget deficit

A

when government spends more money than they receive

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10
Q

budget surplus

A

when the government receives more money than it spends

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11
Q

circular flow

A

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

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12
Q

claimant count

A

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

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13
Q

consumer price index

A

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

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14
Q

consumption

A

consumer spending on goods and services

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15
Q

cost push inflation

A

inflation caused by a decrease in AS

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16
Q

current account

A

a component of a countries balance of payments measuring nations earnings and spendings abroad

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17
Q

current account deficit

A

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

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18
Q

current account surplus

A

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

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19
Q

cyclical unemployment

A

unemployment caused by the lack of AD

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20
Q

deflation

A

a persistent fall int he prices of goods and services

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21
Q

deflationary/contractionary policy

A

fiscal or monetary policy aimed at reducing AD

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22
Q

demand pull inflation

A

inflation caused by an increase in AD

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23
Q

depreciation

A

the reduction in the value of machinery over time

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24
Q

direct tax

A

taxes paid straight to the government by the individual taxpayer

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25
disinflation
reduction in the rate of inflation
26
disposable income
the money that consumers have left to spend, after taxes have been taken away and benefits added
27
Economic growth
an increase in the long run productive potential of an economy; an increase in the amount of goods and services produced, measured by an increase in real gdp
28
29
30
Employed
Someone who does more than 1 hour of paid work a week or is temporarily away from work, on a government supported training scheme or does a minimum of 15 hours unpaid work for their family business (ILO definition)
31
Expansionary policy
Fiscal or monetary policy which is aimed at increasing AD
32
Exports
Goods and services sold to foreigners that bring income into the country
33
Export-led growth
Economic growth arising from an increase in exports
34
Fiscal policy
The use of borrowing, government spending and taxation to manipulate the level of AD and improve macroeconomic performance
35
Frictional unemployment
Unemployment caused when people move between jobs and enter the job market
36
Gross Domestic Product
The value of goods and services produced in a country over a given period of timeThe value of goods and services produced in a country over a given period of time
37
GDP per capita
Total GDP divided by the population
38
Gross investment
Investment both to replace old machinery that has depreciated and to create/buy new ones
39
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
40
Gross National Product (GNP)
The value of goods and services produced by citizens of a country, whether they live in the country or not
41
Government spending
Spending by the government on the provision of goods and services
42
Imports
Goods and services bought from foreigners that takes income out of the country
43
Inactive
Those neither employed nor unemployed; those not participating in the job market
44
Income
A flow of assets
45
Index number
Numbers allowing accurate comparisons to be made over time. The base year value is typically 100
46
Indirect tax
Tax where the person charged with paying the money to the government is able to pass the cost onto someone else
47
Inflation
The general rise in prices of goods and services that erodes the purchasing power of money
48
Injection
Spending power entering the circular flow of income resulting from investment, government spending and exports
49
Interventionist supply side policies
Policies designed to correct market failure, where the government intervenes in the market
50
Investment
Spending by businesses on capital goods, which leads to the creation of real goods
51
Labour Force Survey
A measure of unemployment which surveys people to class them as unemployed, employed or inactive under the ILO definitions
52
Living standards
The quality of life enjoyed by people in a country
53
Long run
When all factors of production are variable
54
Long run aggregate supply (LRAS)
The total output an economy can produce when operating at full output
55
Long run trend rate of growth
The average sustainable rate of economic growth over a period of time
56
Marginal propensity to consume
The proportion of an increase in income spent on consumption
57
Marginal propensity to import
The proportion of an increase in income spent on imports
58
Marginal propensity to save
The proportion of an increase in income that is saved
59
Marginal propensity to tax
The proportion of an increase in income that is taken away in tax
60
Marginal propensity to withdraw
The proportion of an increase in income that is withdrawn from the circular flow
61
Market-based supply-side policies
Policies which are designed to remove anything which prevents the free market system working efficiently
62
Monetary policy
The attempts of the central bank/regulatory authority to control the level of AD by altering base interest rates or the amount of money in the economy
63
Monetary Policy Committee
9 economists who meet monthly to set the Bank rate as well as other monetary instruments
64
Monetary supply
Stock of money in the economy
65
Multiplier
An increase in an injection will lead to an even greater increase in national income
66
National expenditure
The value of spending by households on goods and services
67
National income
The value of money paid by firms to households in return for land, labour, capital and enterprise
68
National output
The value of the flow of goods and services from firms to households
69
Negative output gap
When GDP is lower than predicted; the economy is producing below full output
70
Net exports
Exports minus imports
71
Net investment
Investment adjusted for depreciation; gross investment minus depreciation
72
Nominal GDP
GDP which does not take inflation into account; GDP at current prices
73
Output gap
The difference between the long term trend rate of growth and actual growth
74
Positive output gap
When GDP is higher than predicted; the economy is producing above full output
75
Potential growth
A change in the productive potential of the economy
76
Purchasing power parity
Exchange rate of one currency to another that compares the cost of living in different countries through comparing a typical basket of goods
77
Quantitative easing
When the central bank buys assets in exchange for money in an attempt to increase the money supply
78
Real GDP
GDP which strips out the effect of inflation
79
Real wage unemployment
Unemployment caused when wages are set above the equilibrium wage rate
80
Recession
The trough of the business cycle, when growth is low The government defines it as where real GDP falls in at least two successive quarters
81
Retail Price Index (RPI)
An old measure of inflation which has lost its national statistic status
82
Savings
The decision by consumers to postpone consumption
83
Seasonal unemployment
Unemployment caused when an industry only operates during certain times of the year
84
Short run
When at least one factor of production is fixed
85
Short run aggregate supply (SRAS)
Aggregate supply when at least one factor of production is fixed
86
Short run Phillips curve
Shows the relationship between unemployment and inflation: higher levels of unemployment lead to lower levels of inflation
87
Structural unemployment
Unemployment caused by the long term decline of an industry
88
Supply-side policies
Government policies aimed at increasing the productive potential of the economy and shifting LRAS to the right
89
Total GDP
The GDP of the whole country
90
Trade (business) cycle
The tendency of economic growth to rise and fall above and below the trend rate of economic growth, causing booms and busts
91
Underemployment
Those who are working part time, on zero hour contracts or on government training schemes but would prefer to be full time or those employed in areas below their skill level
92
Unemployed
Those who are without work, able to start work in the next 2 weeks and have actively sought work for the last 4 weeks (ILO definition)
93
Value of GDP
Nominal values of GDP; GDP at current prices
94
Volume of GDP
Real values of GDP; the size of the basket of goods
95
Wealth
A stock of assets
96
Withdrawal
Spending power leaving the circular flow of income resulting from savings, taxation and imports
97

Econ K (6 decks)

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