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3- Economics- Macro > Definitions > Flashcards

Definitions Flashcards

1
Q

Aid

A

Money good and service and soft loans given by the gov of one country or multilateral institution such as the world bank to help another country
Ngos such as oxfam also provide aid

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2
Q

Autonomous consumption

A

That part of consumption that is unaffected by income levels

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3
Q

Base year

A

The time when the index number is set to 100

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4
Q

Capacity utilisation

A

The extent to which a firms existing machinery is being used

Actual output/max possible output. X100

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5
Q

Capital markets

A

Where securities such as shares and bonds are issued to raise medium to long term financing and where shares and bonds are traded on the second hand part of the market
Eg london stock exchange

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6
Q

Capital output ratio

A

The relationship between the number of machines and the quantity they produce is fixed
One machine may be able to produce 100m nails a day

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7
Q

Claimant count

A

Uk measurement of unemp which counts all those recieving job seekers allowance/uc
Excludes those genuinleu looking for work wwho cannot claim benefit

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8
Q

Conflict of objectives

A

In trying to achieve one goal another target is famaged
Ie gov try to boost gdp using tax cuts may cause psnb to rise

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9
Q

Consumer expendaiture

A

Total sum of spenidng by all consumers in a nation
Major component of ad

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10
Q

Discouraged workewrs

A

People who give up looking for a job because they have been rejected so often

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11
Q

Economically active

A

Those in work or seeking work

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12
Q

Eurozone

A

The name used for the group of eu countries that have replaced their national currencies with the euro

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13
Q

Expectations

A

What households or firms think will happen in the future
Optimistic expectations may lead to extra spening and investment and less saving

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14
Q

Expendaiture switching policy

A

A gov policy which aims to eliminate a current account deficit by switching domestic demand away from imports to domestically produced goods
Conversely to reduce a current account surplus, the policu would aim to switch domestic demand away from domestically produced goods towards imports

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15
Q

Factor mobility

A

The econ resources can easily move to diff uses and areas
Eg labour can easily move goegraphically or capital can be switched to produce diff products

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16
Q

Fisher equation of exchange

A

Mv=pq

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17
Q

Fixed exchange rate

A

An exchange rate miantained at a certain level (price in terms of other currencies) by the central banks intervention in the foriegn exchange makret or by changing interest rates to influence hot money flows

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18
Q

Flow

A

Variable
Something that changes and is measured over time
Eg growth rate of gdp

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19
Q

Freely floating exchange rate

A

The exchange rate is determined soley by demand for ans supply of the currency

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20
Q

Funding for lending scheme

A

Incentivises banks and building societies to boost their lending to the uk real econ, esp small and medium sized firms (smes

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21
Q

Golden rule

A

Over tje course of the econ cycle the gov will borrow only to invest (eg in infrasturcture or education and training) and not for current spending on wages of public sector employees or the welfare state
Policy associated withh the last lab gov and is the stated ppoluc of the current labour party

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22
Q

Income induced consumption

A

That paprt of spending for current use that vaires with the aount of income

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23
Q

Index linked

A

The coupling of benefits, salaries or pensions etc to the retail price index in order to make sure that the real value is maintained
Ie the income form them keeps pace with inflation

24
Q

Keynsian lras cruev

A

The amount that will be produced by a nation at every price level according to keynes who believed that macroeconomics equlibirum could occur below full capacity output

25
Q

Lender of last resort

A

Bank of england who will lend cash to commercial banks to esnssur ethat confidence in the abnjing system renains

26
Q

Libor

A

London interbank offered rate
Interest rate that banks charge to lend to each other
This became high when supply of loans was cut during the credit crunch

27
Q

Maturity date

A

The date on which the issuer of a dated secuirty such as a gilt edged secuirty (long dated) or treasuriy bill (short dated) pays the face valkue of the secuirty to the owner of the secuirty

28
Q

Monetarism

A

A belief that inflation is always due to excess money supply and monetary polcy should be used to control excess increases in prices

29
Q

Moral hazard

A

The tendency of individ and firms, once protected against a contingency to behave so as to make the contingency more likely
Eg banks may be more likely to take risks with savers money in the knoweldge that the central bank or gov will bail them out

30
Q

More developed econ

A

Countries with a high degree of econ development, high average incomme per head, high standards of living, usually with servicce indistries dominating manufcturing and investment having taken place over many years in human capital and infrastructure

31
Q

Neutral monetary policy

A

Keeping interest rates and money supply at a level that doesnt increase or decrease ad

32
Q

Participation rate

A

The percentage of the general population who are currently employed or are actively seeking work- econmoically active

Participatiuoin rate %= econ active/population

33
Q

Planned savings

A

The amount of income that consumers expect to hold back rather than spend befroe equlibrium nat income is known as

34
Q

Policy instrument

A

Econ methods or technique used by gov to achieve its goals- eg interest rates txes

35
Q

Policy objective

A

A target that gov or firms are trying to achieve eg cpi at 2% (more generally bigfeet

36
Q

Primary inccome flows

A

Inward primary income flows comprising earnings flowing into the ecno in the current year, which is generated by a countrys citizens assets overseas
Outward primary income flows compirse of earning flowing out of an econ due to assets in the econ bineg owned by foriegners

37
Q

Prudential regulation authority

A

Boe responsible for microprudential regulation
Supervision of banks and other financial institutdion

38
Q

Public sector

A

All local and national governments activities

39
Q

Public sector net borrowing

A

Psnb
Amount of money that a gov has to borrow in one financial year due to the fact it is spending more than it recieves in revenue
Gov spending- gov reciepts

40
Q

Quotas

A

Physical limits on quantities of imported goods allowed into a country

41
Q

Real

A

Measured in quantity terms
To gain real values nominal figures- current prices, need to be adjusted for inflation to see whether more can be pruchased with the amount of pounds than before

42
Q

Reflation

A

An increase in the level of real output due to an increase in ad

43
Q

Replaccement investment

A

Buying machines to replace those that have worn out
Keeping capital stock at same levl

44
Q

Regional multiplie

A

When a change in injection spending has a larger impact on local gdp than origional spending

45
Q

Seconfary income flows

A

Current transfers such as gifts of money, international aiid and gov transfers such as transfers between uk and eu flowing into and out of an econ in a particular year

46
Q

Single european market

A

Market within eu intended to establish free movemebt of factors of prdctio

47
Q

Stock

A

Two meanings
Spare raw materials, work in progress or finished goods that businesses keep
A q at a particular point in time- eg wealth as opposed to a flow which changes like income

48
Q

Technological unemp

A

People discplaced from their jobs due to being replcaed by machines such as robotics or computers

49
Q

Tight labour market

A

The labour market has more jobs than workers so wages tend to rise

50
Q

Transfer incomes

A

Grants such as penisons and social secuirty welfare paymennt that is taken from one group eg taxpayers and given to another such as the poor
Dont add into ad

51
Q

Trend growth rate

A

Lt av increases iin gdp

52
Q

Trend output

A

Level of gdp that would occur if there were no econ cycles but gdp grew at its average rate

53
Q

Un hdi

A

Index based on life expectancy, education and per capita income
Four tiers- v high, hgigh, mediuk , low
Closer to one higher level of human development

54
Q

Vacancy

A

Unfilled job

55
Q

Viisbles

A

Goods that are traded tangible

56
Q

Weighting

A

One variable is given mroe influence on an average than another
The rise in bread prices are more significant than the rise in shoelaces because it makes yp a larger part of the households spenidng
Cpi and rpi weighted average

57
Q

Wto

A

World trade organisation
International body whose purpose is to promotye free trade by persuading countries to aboish import tarrifs, quotas and other barriers to trade
Wto closely associated iwth rise globalisation

3- Economics- Macro (21 decks)

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