3.2 Flashcards
What is Balance of payments(BOP)?
The amount of the current, financial and capital accounts which account for all trade and financial transactions for a country
What is the Circular flow of income?
Model showing the flow of money, factors of production and goods, services in the economy
Deflation
A fall in the price level
What is the Current account?
The account that records the visible and invisible trades of a county as well as government and paydays
What is Disinflation?
Where prices are still rising but at a slower rate
What are Exports?
Goods sent to another country in exchange for money
What are Factor payments?
Payment made by firms for factors being used, e.g. wages/salaries to employees
What are GDP per capita?
GDP divided by the population useful for comparing countries ad reflect changes in population size
What is the Gross domestic product(GDP)?
Total value of goods and service produced in a country. Also referred to as economic growth
What are Imports?
Goods brought into the country in exchange for money
What is Income inequality?
Differences in income that exist between the different groups of earners in society (the gap between the rich and the poor)
What is Inflation?
A rise in the price level
What are Injections?
Cash flowing into the circular flow of income, e.g. Investment, government spending, exports
What are Leakages/withdraws?
Cash flowing out of the circular flow of income e.g. savings, taxes and imports
What are Unemployment?
Members of the labour force that are willing and able to work and seeking employment
What is Wealth?
Collection of assets(houses, land, shares in companies, money saved in bank accounts)
What are the key objectives of macroeconomics? (6)
Price stability, Growth of real GDP, Falling unemployment/ Raising employment, Higher standards of living, Stable balance of payments on the current account, An equitable distribution of income and wealth
TIGER
Trade
Inflation
Growth
Employment
Redistribution of income and wealth
Additional objectives of macroeconomic policy (6)
Balancing the budget and reducing the national debt, Improving economic well-being, Better regional balance in the UK economy, Improved access to public services, Improved competitiveness, Environmental sustainability
What is direct taxation?
A direct tax from income such as corporation or income tax.
What is indirect taxation?
A tax on a good or a service.
What is a progressive and regressive tax?
Progressive taxes are usually implemented on direct taxes and take a higher % of income for higher earners. Regressive taxes are usually implemented on indirect taxes and take a higher % of income for lower earners.
