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Macro 13 > 4.5 - External Shocks > Flashcards

4.5 - External Shocks Flashcards

1
Q

What are economic/external shocks?

A

Unexpected events that induce sudden changes in economic variables

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2
Q

How does development protect a nation against shocks?

A

Diversified production range
No primary dependency
Adaptability

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3
Q

What are the 2 types of economic shock?

A

Demand side shock
Supply side shock

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4
Q

What is a demand side shock?

A

Change which affects 1+ factors of AD

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5
Q

What is a supply side shock?

A

Affects SRAS + has potential to harm LRAS

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6
Q

Give 3 examples of demand side shocks

A

Trade partner goes into recession
Unexpected austerity measures
Credit/Lending crisis

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7
Q

Give 3 examples of supply side shocks?

A

Steep commodity price rise
Political turmoil
Natural disasters + climate
Unexpected tech breakthrough

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8
Q

What are the ‘main’ global shocks?

A

World demand shock
World supply shock
World financial shock

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Macro 13 (61 decks)

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