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22 Cards in this Set
- Front
- Back
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Multiplier process |
An increase in investment spending leading to a greater increase in GDP |
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Capital stock |
Capital goods include items such as machinery, behicles and buildings. Capital stock is the monetary value of such goods that exist at a given point in time |
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Real incomes |
The amount of money coming into a household over a period of time after the effects of inflation have been removed |
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Deficit on the current account of the balance of payments |
The current account of the balance of payments records trade in goods and services, income flows and current transfers. It is in deficit when net imports is greater than net exports |
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Economic cycle |
Fluctuations in economic activity Real GDP Real national income Employment/unemployment Actual growth fluctuating around trend rate |
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Rate of interest |
The reward of saving The cost of borrowing Expressed as a % of the money saved or borrowed |
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Structural unemployment |
Unemployment resulting from the decline in a particular industry, leaving people unemployed because they do not have the skills needed to meet the labour demands of the economy |
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Cost push inflation |
An increase in the price level caused by a sustained increase in firms' costs of production |
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Disposable income |
The money that comes into a household from various sources, including welfare benefits After taxes on income |
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Recovery |
A phase of the economic cycle when real GDP starts to grow again after a recession |
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Aggregate demand |
Total spending on all goods and services produced in the fomestic economy during a given time period. |
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Supply-side policies |
Measures takem by the government that are designed to increase the underlying rate of growth of the economy Designed to shift LRAS to the right |
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Productive capacity |
The amount of goods and services that the economy is capable of producing |
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Budget deficit |
When government spending is more than it is receiving from taxation |
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Investment |
The increase in the stock of capital during a given time period |
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Exchange rate |
The amount of the domestic currency needed to buy a goven amount of foreign currency Meadures value of one currency in terms of another |
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Balance of trade in goods and services |
The total value of goods and services exported minus the total value of goods and services imported |
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Real GDP |
A measure of national income with the effects of inflation removed |
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Negative output gap |
When actual GDP is below the economy's productive potential |
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Economic growth |
The annual % change in the output of the economy |
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Labour productivity |
Output per worker per period of time |
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Savings |
The portion of income that is not spent Income-consumption=savings |
