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Economics Macro > Chapter 6 - The measurement of macroeconomic performance > Flashcards

Chapter 6 - The measurement of macroeconomic performance Flashcards

1
Q

What is MACROECONOMICS

A

The study of the whole economy at the aggregate level

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2
Q

What is a POLICY OBJECTIVE

A

A target or goal that policy-makers aim to ‘hit’

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3
Q

What is SHORT-RUN ECONOMIC GROWTH

A

Growth of real output resulting from using idle resources

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4
Q

What is LONG-RUN ECONOMIC GROWTH

A

Increase in the economy’s potential level of output, outward shift in PPF

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5
Q

What is GROSS DOMESTIC PRODUCT (GDP)

A

Sum of all goods and services produced in a period of time

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6
Q

What is REAL GDP

A

Measure of goods and services produced in an economy adjusted for inflation

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7
Q

What is NOMINAL GDP

A

GDP measured at current market prices

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8
Q

What is a RECESSION

A

A fall in real GDP for 6 months or more

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9
Q

What is FULL EMPLOYMENT

A

Beveridge definition- 3% of the labour force unemployed

Free market definition - where the number of workers who are wanted to employ equals the number wanting to work

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10
Q

What is the CLAIMANT COUNT

A

Method of measuring unemployment based on how many people are claiming unemployment benefits

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11
Q

What is the LABOUR FORCE SURVEY

A

Quarterly sample survey measuring labour status during a period of 1-4 weeks

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12
Q

What is INFLATION

A

Continuing rise in the average price level

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13
Q

What is DEFLATION

A

Continuing fall in the average price level

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14
Q

What is DISINFLATION

A

When the rate of inflation is falling but still positive

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15
Q

What is the PRICE INDEX

A

index number showing how price has changed in relation to the base year

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16
Q

What is the CONSUMER PRICES INDEX (CPI)

A

official measure of inflation in the uk from a basket of 700 consumer goods and services

17
Q

What is the RETAIL PRICES INDEX (RPI)

A

older measure of inflation

18
Q

What is INDEXATION

A

automatic adjustment of items to changes in the price level using a price index

19
Q

What is the BALANCE OF PAYMENTS

A

record of all currency that flows in and out of a country in a particular time period

20
Q

What is the CURRENT ACCOUNT OF THE BALANCE OF PAYMENTS

A

currency flows in and out of a country in a time period in payment for imports and exports, together with income and transfer flows

21
Q

What are EXPORTS

A

goods and services sold to other countries

22
Q

What are IMPORTS

A

goods or services purchased from other countries

23
Q

What is the BALANCE OF TRADE

A

difference between imports and exports

24
Q

BALANCE OF TRADE DEFICIT

A

imports exceed exports

25
Q

BALANCE OF TRADE SURPLUS

A

exports exceed imports

26
Q

BALANCED BUDGET

A

government spending equals government revenue (mostly tax revenue)

27
Q

BUDGET DEFICIT

A

government spending is greater than government revenue

28
Q

POLICY CONFLICT

A

when two policy objectives cannot be achieved at the same time; the better one does, the worse the other does

29
Q

TRADE OFF BETWEEN POLICY OBJECTIVES

A

making the best out of the two extremes of policy conflict

30
Q

KEYNSIAN ECONOMISTS

A

followers of keynes, who believe that governments should control the economy through fiscal policy

31
Q

PRO-FREE MARKET ECONOMISTS

A

dislike government intervention and promote free markets

32
Q

MONETARY POLICY

A

the use of interest rates and other monetary instruments to achieve policy objectives

33
Q

FISCAL POLICY

A

the use of government spending and taxation to achieve government objectives

34
Q

PERFORMANCE INDICATOR

A

provides information for judging the success or failure of a particular type of government policy

35
Q

INDEX NUMBER

A

a number used to accurately compare two values. the base years value is set to 100 and the percentage increases are then added to that value

Economics Macro (4 decks)

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