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19 Cards in this Set
- Front
- Back
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Economic growth |
The percentage change in real GDP over a period of time |
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Unemployment |
... exists when an individual is willing and able to work, actively seeking employment, but without a job |
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Inflation |
A sustained and persistent increase in the general level of prices |
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Balance of payments |
A record of a country's transactions with the rest of the world |
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Output gap |
The difference between the actual and potential output of an economy, usually measured as the difference between the actual rate of growth and the trend rate of growth |
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Labour productivity |
Output per unit of labour (can be per person or per hour worked) |
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The multiplier |
where an increase in any component of AD leads to a larger final increase in GDP k = 1 / (1-mpc) |
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The accelerator |
a theory of investment that states that the level of investment depends on the rate of change of GDP |
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Economic development |
a broader concept than economic growth, it is the process of improving people's economic well-being and quality of life |
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Current account |
trade in goods + trade in services = balance of trade + net investment income (profit, interest, dividends) + current transfers |
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marginal propensity to consume (mpc) |
the proportion of an additional pound of income spent on UK goods and services |
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demographic transition |
the process by which a population increases rapidly, stabilises and eventually declines Four main stages: equal birth and death rates birth rate exceeds death rate birth rate falls in line with death rate sub-replacement fertility
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sustainable development |
development that meets the needs of the current generation without compromising the ability of future generations to meet their own needs |
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Frictional unemployment |
workers moving between jobs |
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Comparative advantage |
where a country can produce a good or service at a lower opportunity cost than another country |
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Absolute advantage |
where a country can produce a good or service at a lower resource cost than another country |
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Structural unemployment |
caused by changes in the global pattern of supply and demand (e.g. another country supplying a good or service more cheaply, or a decrease in the world demand for a good or service) |
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Aggregate demand |
the total planned spending on an economy's output at a given price level over a specified period of time = C + I + G + (X-M) |
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Remittances |
transfer payments made by migrant workers to families in their country of origin |
