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16 Cards in this Set
- Front
- Back
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What are the major macro economic issues? |
Economic growth
Unemployment
Inflation
Balance of payments & exchange rates |
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What are the main macro objectives? |
•full employment •price stability •economic growth & rising living standards |
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What are the policy instruments? |
•Monetary policy (control interest rates) • fiscal policy (taxes) •control of prices & wages (e.g. minimum wages) •supply-side policies (e.g. training, eductaion) |
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Define rate of economic growth |
The % increase in national output (normally expressed over a 12 month period) |
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Define unemployment |
The no. of people who are without work, but are available for work at current wages |
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Define inflation |
Rising price levels N.B. governments typically try to achieve rates of inflation that are neither too low or too high I'm the UK the target is 2% |
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What effect does international trade have? |
Drives economic growth :) Over synchronised economies :( Rising income inequality :( Displacement of unskilled labour :( |
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Describe the business cycle |
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How do you measure national income/output? |
Gross domestic product (GDP) = the market value of all final goods & services produced within a country in a year |
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What are the pros of economic growth? |
Increased consumption Reduces other macro problems Scope of redistribution |
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What are the cons of economic growth? |
Current opportunity costs May generate extra wants Adverse social effects Environmental costs Depletion of resources |
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How do you calculate the unemployment rate? |
No. employed / total labour force |
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Define claimant unemployment |
The no. of people in receipt of unemployment related benefits |
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How can you measure unemployment? |
Claimant statistics Labour force surveys Emplpyment/population ration |
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Describe how labour markets work |
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What are the 2 main types of unemployment & when do they occur? |
Equilibrium:
Disequilibrium:
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