book 1 - objectives of gov economic policy Flashcards
a policy ________ is the _____ or goals that the _______ wants to _________.
a policy objective is the targets or goals that the government wants to achieve.
policy ___________ are the ________ the government uses to try and achieve its ___________.
policy instruments are the tools that the government uses to try and achieve its objectives.
what are the main 4 economic objectives?
1) economic growth
2) price stability (low & stable inflation)
3) full employment
4) satisfactory balance of payments
short run economic growth is the growth of real _____ resulting from using _______ resources including the factors of ________ . (ppf1 to ppf____)
short run economic growth is the growth of real output resulting from using idle resources including the factors of production. (PPF1 to PPF2)
price stability is when ______ consumer prices for goods and services are ________ over time.
price stability is when average consumer prices for goods and services are constant over time.
the government wants unemployment to be ________ or less.
the government wants unemployment to be 3% or less.
balance of ______ is a _________ of all __________flows in and out of a __________ in a period of ______.
balance of payments is a record of all currency flows in and out of a country in a period of time.
current _________ is all ________ flows in and out of a _________ in payment for _______ and _________.
current account is all currency flows in and out of a country in payment for imports and exports.
________ GDP is the measure of all goods & services produced in economy adjusted for inflation.
real GDP is the measure of all goods & services produced in economy adjusted for inflation.
________ GDP measured at current market prices, not adjusted for inflation.
nominal GDP measured at current market prices, not adjusted for inflation.
________ run economic ______ is the growth of _____ output from using ______ resources and a _________ along the ppf.
short run economic growth is the growth of real output from using idle resourcesand a movement along the ppf.
_______ run economic growth is an ___________ in the economy’s ________ level of _______ and an __________ shift in the ppf.
long run economic growth is an increase in the economy’s potential level of output and an outward shift in the ppf.
a balance of payment ______ means a government must borrow money from another source to pay for its imports.
a balance of payment deficit means a government must borrow money from another source to pay for its imports.
if the value of exports exceed value of imports there is a BOP _______.
if the value of exports exceeds the value of imports there is a BOP surplus.
if the value of imports exceed value of exports there is a BOP _______.
if the value of imports exceed value of exports there is a BOP deficit.
