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Economics > Chapter 13-16 > Flashcards

Chapter 13-16 Flashcards

1
Q

Macroeconomics

A

the branch of economics concerned with large-scale or general economic factors, such as interest rates and national productivity

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2
Q

Property Income From Abroad

A

income earned by assets held in foreign countries

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3
Q

Net Property Income From Abroad

A

the difference between income earned from assets abroad minus income paid to foreign assets

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4
Q

GDP

A

the total value of all the goods and services produced and sold in a single year within a country

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5
Q

GNI

A

the value of all goods and services produced by a country in a single year (including foreign assets and excluding assets from foreign countries)

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6
Q

Real GDP / GNI

A

nominal GDP / GNI adjusted for inflation

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7
Q

Boom

A

a period of increased commercial activity within an economy or industry (crest)

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8
Q

Trough

A

a point that marks the end of a recession

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9
Q

Recession

A

two consecutive quarters of falling GDP

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10
Q

Recovery

A

the business cycle stage following a recession - GDP is gaining stability again

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11
Q

Aggregate Demand

A

the total spending on goods and services in a period of time at a given price level

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12
Q

Durable Good

A

a good that can be used over a long period of time (usually more than a year) (car, appliances)

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13
Q

Non-Durable Good

A

goods that get immediately used up over used in a very short period of time (toilet paper, rice, newspaper)

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14
Q

Replacement Investment

A

when firms spend on capital in order to maintain the productivity of their existing capital

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15
Q

Induced Investment

A

when firms spend on capital to increase tier output to respond to higher demand in the economy

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16
Q

Capital Stock

A

includes all goods that are made by people and used to produce other goods and services (factories, machines, offices, computers)

17
Q

Disposable Income

A

the income that people have remaining for spending and saving after incomes taxes have been paid

18
Q

Exports

A

goods and services that are bought by foreigners

19
Q

Imports

A

goods and services that are brought into the country

20
Q

Aggregate Supply

A

the total amount of goods and services that all industries in the economy will produce at every given price level

21
Q

Commodities

A

a good sold for production or consumption just as it was found in nature (primary product)

22
Q

Stagflation

A

high inflation combined with high unemployment and stagnant demand in a country’s economy

23
Q

Output Method

A

a method to calculate GDP by finding the actual value of all the goods and services produced in a nation

24
Q

Income Method

A

a method to calculate GDP by finding the amount of all incomes combined in an economy

25
Q

Expenditure Method

A

a method to calculate GDP by finding the amount of spending on all goods and services in the economy [C+I+G+(X-M)]

26
Q

GDP per Capita

A

GDP / population

27
Q

Consumption (C)

A

the total spending by consumers on domestic goods and services

28
Q

Investment (I)

A

the addition of capital stock to the economy, carried out by firms

29
Q

Government Spending (G)

A

money spent by the government on goods and services (health, education, law and order, social security, housing, defense)

30
Q

Net Exports (X-M)

A

export revenues minus import expenditures

31
Q

Short Term (macro def)

A

the period of time when the prices of the factors of production do not change (most importantly: the price of labor stays fixed)

32
Q

Supply Side shocks

A

shift in the SRAS curve

33
Q

New Classical LRAS

A
  • belief of no government intervention
  • perfectly inelastic supply curve, as economy is running at full capacity
34
Q

Keynesian AS

A

Phase 1 : perfectly elastic - as quantity increase price does not because of spare capacity - high levels of unused factors such as unemployment labor and underutilized capital
Phase 2 : when the economy is nearing potential output and the spare capacity becomes used up, with scarce factors of production
Phase 3 : when the economy reaches its full capacity and it becomes impossible to increase output because all FOP are fully employed - perfectly inelastic curve

35
Q

D E D U

A

D = Define key terms
E = Explain economic theory
D = Diagrams explained
U = Understanding of content

36
Q

Spare Capacity

A

when there are spare factors of production including land, labour and capital - an economy with a lot of spare capacity has an elastic supply curve

37
Q

Hidden Economy

A

the illegal market in a nation
- working without a permit / under the table
- drug trade
- trafficking

38
Q

Leakages

A
  • saving
  • imports
  • taxation
39
Q

Injection

A
  • government spending
  • exports
  • investment

Economics (8 decks)

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