Aqa Macro Economics

Front 1

Accelerator Effect

Back 1

The relation between the change in new investment and the rate of change of national income

Front 2

Aggregate Demand

Back 2

Total planned expenditure in the economy known by the identity C + I + G + (X - M)

Front 3

Aggregate Supply

Back 3

The total value of goods and services supplied in the economy

Front 4

Balance Of Payments

Back 4

Exports minus imports - a deficit means more is imported than exported

Front 5

Balance of Trade

Back 5

Visible exports minus visible imports

Front 6

Balanced Budget

Back 6

Where government recipt equal government spending in a financial year

Front 7

Boom/Bust Policy

Back 7

The government using macroeconomic tools to stimulate and then contract economy

Front 8

Broad Money

Back 8

Money that is held in banks and building societies but that is not immediately accessible

Front 9

Budget Surplus

Back 9

Where government recipts exceeds spending in a financial year (PSDR)

Front 10

Capital Spending

Back 10

Government spending to improve the productive capacity of a nation, including infrastructure, schools and hospitals

Front 11

Central Bank

Back 11

The financial institution in a country or group of countries typically responsible for issuing notes and coins and setting short term interest rates

Front 12

Classical View

Back 12

Economists who believed that recessions and slumps would cure themselves

Front 13

Contractionary Fiscal Policy

Back 13

Increasing levels of tax revenues related to government spending, appropriate during a boom in economic activity

Front 14

Cost Push Inflation

Back 14

Where increased cost of production results in firms increasing their prices leading to an increase in the general price level

Front 15

CPI (Consumer Price Index)

Back 15

A measure of the price level similar to HICP (Harmonised Index of Consumer Prices) used widely in the Eurozone. Used since 2004 as a target measure for inflation by the government and MPC

Front 16

Credit Crunch

Back 16

Where borrowing becomes more expensive or unavailable.

Front 17

Current Account equilibrium

Back 17

Current account equilibrium where the current account exercises no effect on the domestic macroeconomy.

Front 18

Current Spending

Back 18

Government spending on a day-to-day running of the public sector, including raw materials and wages of public sector workers

Front 19

Cyclical Unemploymet

Back 19

Demand deficient employment that occurs as a result of the economic cycle

Front 20

Deflation

Back 20

A situation where prices persistently fall

Front 21

Deindustrilisation

Back 21

A fall in the proportion of national output accounted for by the manufacturing sector of the economy

Front 22

Demand Deficient Unemployment

Back 22

Insufficient aggregate demand in the economy to employ the available labour

Front 23

Demand Pull Inflation

Back 23

Where aggregate demand exceeds aggregate supply leading to an increase in the level of prices

Front 24

Demand-side Fiscal Policies

Back 24

Changes in the level of structure of government spending ad taxation aimed at influencing one or more of the components of aggregate demand

Front 25

Discretionary Fiscal Policy

Back 25

The deliberate manipulation of government spending and taxation to influence the economy

Front 26

Disequilibrium

Back 26

A situation within the market where supply does not equal demand

Front 27

Economic Indicatiors

Back 27

Economic statistics that provide information about the expansions and contractions of business cycles

Front 28

Economic Modules

Back 28

These are used to show the essential characteristics of complicated economic conditions in order to analyse them and predict the results of changes of variables

Front 29

Employment

Back 29

Where labour is and actively engaged in a productive activity usually in exchange for payment such as wages

Front 30

Exchange Rate

Back 30

The prices at which one currency, e.g the pound, exchanges for another e.g. the US dollar

Front 31

Expansionary Fiscal Policy

Back 31

Increasing levels of government spending relative to tax revenue, appropriate to stimulating aggregate demand during a down turn in economic activity

Front 32

Exporting

Back 32

The sale of goods or services to a foreign country generates income for the home country

Front 33

Exports

Back 33

Goods or services sold abroad

Front 34

Fiscal Policy

Back 34

The policy of the government regarding taxation and government expenditure

Front 35

Flow

Back 35

Measured over a specified period of time

Front 36

Frictional/Search Unemplyment

Back 36

People between jobs

Front 37

GDP per capita

Back 37

GDP divided by the population - a measure of living standards

Front 38

Gross Domestic Product

Back 38

The total value of goods and services produced in the economy

Front 39

Hot Money

Back 39

Money that is liable to rapid transfer from one country to another

Front 40

Human Capital

Back 40

The skills, abilities, motivation and knowledge of labour. Improvements in human capital raise productivity and can shift the PPB to the right

Front 41

Importing

Back 41

The purchase of goods and services from abroad-leads to expenditure for the home country

Front 42

Imports

Back 42

Goods or services purchased from abroad

Front 43

Income

Back 43

A flow of earnings to a factor of production over a period of time e.g wages or salaries

Front 44

Production Possibility Boundary

Back 44

The PPB indicates the maximum possible output that can be achieved given a fixed set of resources and technology in a particular time period

Front 45

Real GDP/Real National Income/ Real Output

Back 45

GDP/Income/Output figures adjusted for inflation

Front 46

Real Interest Rate

Back 46

The money rate of interest minus the rate of inflation

Front 47

Recession

Back 47

When an economy is growing at less that its long-term trend rate of growth

Front 48

Repo Rate

Back 48

The interest rate that is set by the Monetary Policy Committee of the Bank of England in order to influence inflation. Short for ; sale and repurchase rate'

Front 49

Savings

Back 49

Withdrawl from the circular flow

Front 50

Structural Employment

Back 50

Unemployment caused by a change in the demand side or supply side of the economy.

Front 51

Supply-side Fiscal Policy

Back 51

Changes in the level or structure of government spending and taxation designed to improve the supply side of the economy through influencing incentives to save, to supply labour , to be entrepreneurial, and to promote investment , which are largely micro economic in nature

Front 52

Supply-side Policies

Back 52

A range of measures designed to increase aggregate supply and hence the economy and hence the potential output of the economy though many improvements may come from the private sector

Front 53

Index Numbers

Back 53

A weighted average of a group of items compared to a given base value of 100

Front 54

Inflation

Back 54

A persistent increase in the level of prices

Front 55

Injections

Back 55

Money that originates outside the circular flow and so will increase national income/output/expenditure

Front 56

Investment

Back 56

Spending by firms on buildings, machinery and improving the skills of the labour force

Front 57

Keynesian

Back 57

View that suggests how government could cure mass unemployment

Front 58

Long Run Aggregate Supply

Back 58

The economy's productive capacity

Front 59

Monetary Policy

Back 59

Controlling the macro economy via changes to monetary variables such as the money supply or interest rates

Front 60

Money Supply

Back 60

The total amount of money in an economy

Front 61

Multiplier Effect

Back 61

Where an increase or decrease in spending leads to a larger than proportionate change in the national income

Front 62

Negative Output Gaps

Back 62

Where the economy is producing less than trend output

Front 63

Nominal GDP

Back 63

GDP figures not adjusted to inflation

Front 64

Positive Output Gap

Back 64

Actual GDP exceeds trend GDP increasing inflationary pressure

Front 65

Supply side shock

Back 65

Something that will increase or reduce the costs, hence supply side of all firms in the economy, ie price of oil

Front 66

Total Factor Productivity

Back 66

The overall productivity of inputs used by a firm in producing a particular level of out put

Front 67

Transfer Payments

Back 67

Government payment to individuals for which no service is given in return e.g state benefits

Front 68

Transmission Mechanism of Monetary Policy

Back 68

How changes in the base interest rate influence the components of aggregate demand

Front 69

Unemployment

Back 69

Those without a job who are seeking work at current wage rate

Front 70

Unemployment Trap

Back 70

Where individuals receive more in benefit payment than they would be payed in a job

Front 71

Withdrawls

Back 71

Any money not passed on in the circular flow and has the effect of reducing national income/output/expenditure