Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
33 Cards in this Set
- Front
- Back
Unemployment |
The number of people of a working age that are willing and able to find work yet do not have a paid job |
|
Economic Activity |
Those either looking for work or in work |
|
Economically Inactive |
Those of working age who have chosen not to do paid work or look for paid work |
|
Gross Domestic Product (GDP) |
The value of output produced by domestic based resources per year |
|
Economic Growth |
Rate of increase in national output per year |
|
Real Growth |
Growth of GDP after inflation has been accounted for |
|
Inflation |
Inflation is a continuing and persistent increase in the average price level. Rate of change in average price level |
|
Balance of Payments |
(X-M) A record of the transactions between residents of one country and those living abroad over a year |
|
Balance of Payments - Current Account |
The net inflow of money to a country arising from international trade in goods and services, investment, income and transfers |
|
Investment Income |
Earnings from ownership of assets |
|
Aggregate Demand |
The sum of all planned spending on domestic output at a given general price level per period |
|
Aggregate Supply |
The sum of all planned domestic production at a given general price level per period |
|
Consumption (C) |
Spending by domestic households on consumer goods and services |
|
Investment (I) |
Spending by domestic firms on capital goods |
|
Circular Flow of Income |
Model which explains what determines the equilibrium level of national income |
|
Injection (J) |
Spending on domestic output which comes from outside the simple circular income i.e. investment, government spending and exports |
|
Withdrawals/Leakages (W) |
Income which is not spent on domestic output (consumption) i.e. savings, taxation |
|
Multiplier Effect
|
The knock on effect of a change in injections or withdrawals on national income
|
|
Wealth Effect |
A rise in personal wealth will encourage consumer to spend more and save less
|
|
Recession
|
Declining real GDP for two successive quarters
|
|
Output Gap
|
Actual GDP - Sustainable GDP
|
|
Demand Management
|
When the government attempts to control AD by adjusting tax rates, interest rates and gov. spending in order to avoid booms (high inflation) and busts (high unemployment) |
|
Supply Side Policies
|
Government attempts to increase AS |
|
Fiscal Policy |
Manipulation of gov. spending and taxation to achieve macroeconomic goals |
|
Monetary Policy |
Manipulation of interest rates to achieve macroeconomic goals |
|
Exchange Rate |
The price of one currency in terms of another |
|
Interest Rates (r) |
The price of liquidity (money in a spendable form) e.g. bank deposits or cash |
|
Disposable Income (Yd) |
Household income after subtracting direct taxes (income tax and national insurance contributions and adding gov. benefit payments) |
|
Productivity Gap |
The difference between output per worker in two or more countries, each with a different average labour productivity |
|
Productivity |
Output per worker measured over a period of time |
|
Demand Pull Inflation |
Demand pull inflation is the name given to a continuously rising price level cause by excess aggregate demand in the economy |
|
Budget Deficit |
Difference between revenue coming in and expenditure flowing out |
|
Output Gap |
national output is higher or lower than it would have been if the country had growncontinuously at its trend rate of growth. |