Balance of Payments Flashcards
1
Q
What is actual growth?
A
Short run demand led growth (increase in AD)
2
Q
What do Keynesians believe we should do to boosting AD?
A
Expansionary policies.
3
Q
What happens when we boost AD too much and hit Yfe?
A
Supply constraints.
4
Q
How can we avoid supply constraints but still boost AD?
A
Boost LRAS.
5
Q
What is the balance of payments?
A
Record of all the economic transations between the UK and the rest of the world?
6
Q
What is money coming in called?
A
Credit (Exports)
7
Q
What is money going out called?
A
Debit (Imports)
8
Q
What does the balance of trade in goods show?
A
Difference between the total value of exports and the total value of imports of goods.
