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29 Cards in this Set
- Front
- Back
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Economic growth |
An increase in real or potential GDP |
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GDP |
total value of output of goods and services produced in one country in one year |
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Inflation |
A general and persistent increase in the price level |
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Recession |
2 consecutive quarters of negative economic growth |
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Economic slowdown |
A decreased rate of economic growth |
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Unemployed |
You do not have a job but you are actively looking for work |
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Economically inactive |
Not looking for work |
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Underemployed |
You have a job but you want to work more hours (eg zero hour contracts) |
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Measures of unemployment |
1) Claimant count- monthly count of all individuals in the uk claiming (JSA)
2) labour force survey by the ILO- A telephone survey of 60,000 households in the uk takes place 5 times at 3 month intervals, asks 3 qs: a) do you have a job? b) are you available to work in the next 2 weeks? c) have you looked for work in the past 4 weeks? Asked to people aged 16+ |
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Purchasing power parity |
It compares the cost of of identical baskets of goods compared to a single currency |
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Inflation |
A general and persistent increase in the price level |
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Deflation |
A general and persistent decrease in the price level |
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Disinflation |
When the rate of inflation decreases |
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Inflation |
2.4% |
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Inflation target |
2% +- 1% |
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Interest rates |
0.75% |
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Measure if inflation is on target |
CPI Annual expenditure survey- identify a basket of 650 goods from 7,000 households, weighted by proportion of income Monthly price survey- 180,000 prices in 150+ locations, looks at lots of prices due to variation in stores and places |
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Balance of payments |
A record of international transactions over the course of a year |
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Current account of the balance of payments |
A record of a country's trade of exports, imports, investment income and current transfers with the rest of the world |
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Within the current account |
1) trade in goods (balance of trade) 2) trade in services (balance of trade) 3) net investment income 4) current transfers |
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Exporter + importer |
UK 11th largest exporter Uk 6th largest importer |
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AD formula |
AD = C+I+G+(X-M) |
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Ad weightings |
C= 60% I= 15% G= 20% (X-M)= 5% |
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Real income |
Income adjusted for inflation |
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Disposable income |
Income after tax |
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Discretionary income |
Income after interest rate payments |
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Debt owed GDP |
86.7% |
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Short run |
All factors of production are fixed. The only way to increase output is to increase employment or efficiency of resources |
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A shift in short run diagram |
Changes to the cost of production (subsidies, corporation tax, raw materials, wages) |
