Deck 5 (R-Z) Flashcards
Real exchange rate
The nominal exchange rate adjusted for differences in relative inflation rates between countries
Real value
Value of an economic variable, taking account of changing prices through time
Recession
Occurs when GDP falls for two or more consecutive quaters
Retail Price Index (RPI)
A measure of the average level of prices in the UK
Revaluation
A process whereby a government raises the price of domestic currency in terms of foreign currency
Seasonal unemployment
Unemployment that arises in seasons of the year when demand is relatively low
Short-run aggregate supply curve
A curve showing how much output firms would be prepared to supply in the short-run at any given overall price level
Short-run economic growth
An increase in actual GDP
Structural unemployment
Unemployment arising because of changes in the pattern of economic activity within an economy
Supply-side policies
A range of measures intended to have a direct impact on aggregate supply - and specifically the potential capacity output of the economy
Sustainable development
‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs’ - Brundtland Commission 1987
Terms of trade
The relative prices at which exchange takes place, the ratio of export prices to import prices
Total factor productivity
The average productivity of all factors, measured as the total output divided by the total amount of inputs used
Trading possibilities curve
Shows the consumption possibilities under conditions fo free trade
Unemployed
People who are economically active but not in employment
Visible trade
Trade in goods
Voluntary unemployment
Situation arising when an individual chooses not to accept a job at the going wage rate
Workforce
People who are economically active - either in employment or unemployed
World Trade Organisation (WTO)
A multilateral body responsible for overseeing the conduct of international trade
Real disposable income
Income after taxes on income have been deducted and state benefits added and the result has been adjusted to take into account changes in the price level
Real GDP
The country’s output measured in constant prices so has been adjusted for inflation
Real interest rate
The nominal interest rate minus the inflation rate
Reflationary
Policy measures intended to increase aggregate demand
Regressive tax
A tax that takes a greater percentage from the income of the poor
Savings ratio
The proportion of disposable income that is saved
Shoeleather costs
The cost in terms of time and effort (opportunity cost) involved in people trying to counter-act the effects of inflation, such as holding less cash and having to make additional trips to the bank
Tariff
A tax on imports
Trend growth
The expected increase in potential output over time, measures how fast the economy can grow without generating inflation
Voluntary Export Restraint (VER)
A limit placed on imports from a country with the agreement of that country’s government
