Chapter 11: macroeconomic performance Flashcards
Aggregate Demand
Total demand in the economy made up of consumption, investment, gov. spending and net exports
Aggregate supply
The total volume of goods and services supplied in the economy.
Economic growth
The capacity of the economy to produce more goods and services over time.
Gross domestic product
The total value of goods and services produced in the economy
Negative output gap
When actual GDP exceeds trends GDP increasing inflationary pressure.
Trade-off
where on macroeconomic objective has to be curtailed in favour of another objective.
Imports
Goods or services purchased from abroad.
Exports
Goods or services sold abroad.
Employment
Where labour is actively engaged in productive activity, usually in exchange for payments such as wages.
Unemployment
Those without a job but who are seeking work at current wage rates.
Positive output gap
When actual GDP exceeds trend GDP increasing inflationary pressure.
Exporting
The sale of goods or services to a foreign country - generates income for the home country.
Importing
the purchase of goods and services from abroad - leads to expenditure for the home country.
Economic indicators
Economic statistics that provide information about the expansions and contractions of business cycles.
Nominal GDP/ nominal national income/ nominal output
GDP/ income/ output figures not adjusted for inflation.
