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18 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)

Actual economic growth

The rate if growth of GDP in a period


aggregate demand

The total amount of spending on goods and services produced in an economy during a period of time

Total period

Automatic stabilisers

Effects by which government expenditure adjusts to offset the effects of recession and boom without the need for active intervention

Average propensity to consume

The proportion of income that households devote to consumption

Balance of payments

Set of accounts showing the transactions conducted between residents of a country and the rest of the world


Bank rate

The interest rate that is set by the monetary policy committee of the bank of England in order to influence inflation

Business cycle

A phenomenon whereby GDP fluctuates around its underlying trend following a regular pattern

Capital productivity

A measure of output per unit of capital

Circular flow of income, expenditure and output

A model of the economy which shows the movement of goods and services between households and firms and their corresponding payments in money terms

Claimant count of unemployment

The number of people claiming the jobseekers allowance each month

Consumer price index (cpi)

Measures general level of prices of goods in the UK, rate of change been used as gov inflation target since January 2004


Total planned household spending

Consumption function

The relationship between consumption and disposable income effected by how much households spend on consumption

Cost push inflation

Inflation initiated by an increase in the costs faced by firms arising on the supply side

Crowding out

A process by which an increase in government expenditure crows out private sector activity by raiding the cost of borrowing

Cyclical unemployment

Unemployment that arises during he downturn of the economic cycle such as a recession


A fall in the average level of prices (negative inflation)

Demand deficient unemployment

Not enough demand in an economy so the equilibrium level of output is below full employment