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Macroneconomic Booklet 3 > Definitions > Flashcards

Definitions Flashcards

1
Q

Underemployment

A

When a worker has a job but is working fewer hours that they would like

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2
Q

Unemployment

A

People who are actively seeking employment at prevailing wage rate but are unable to find it

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3
Q

What are the 2 measures of unemployment

A

Climant count

And

LFS/LO

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4
Q

Climant count

A

Number of people currently signing in to claim job seekers allowance

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5
Q

LFS/LO

A

Labour force of 60 000 households identifying the number of people out of work , directly searching and willing to start in the next two weeks

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6
Q

Inflation

A

Sustained rise in the general price level

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7
Q

Deflation

A

Sustained fall in the general price level

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8
Q

Disinflation

A

Fall in the rate at which price rises

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9
Q

Core inflation

A

Inflation Measured without the most volatile prices eg energy and food

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10
Q

Hyperinflation

A

When price rises extremely quickly
Usually and excess of 100 % per year

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11
Q

Anticipated inflation

A

Inflation economic agents expects and factor into there decisions

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12
Q

Unanticipated inflation

A

Inflation is higher than economic agents expect

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13
Q

Basket of goods

A

Most popular product and services majority of the population spend there
Money on

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14
Q

Demand push inflation

(Changes to AD)

A

Average price increase because of an increase in AD

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15
Q

Cost push inflation

(Changes to Aggregate supply )

A

Inflation caused by rising cost of production

(Supply leading to increases costs )

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16
Q

Benign deflation

A

Fall in costs that acts as a boost to real incomes

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17
Q

4 things about benign inflation

A

Creates a short run economic growth

Reduces GPL ( target rate 2+-1%)

Increase employment

May improve current account balance

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18
Q

Malign deflation

A

Fall in general price level caused by a fall in AD

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19
Q

4 things about malign inflation

A

Fall in short run economic growth possible recession

Reduces GPL

Fall in employment

May improve current account balance

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20
Q

Monetary policy

A

Control of Intrest and exchange rates

21
Q

Exchange rates

A

Price or value of one currency in terms of another

22
Q

Current account deficit

A

Currency outflows exceed currency inflows

(Spend more money you get in return )

23
Q

Current account surplus

A

Currency inflows exceeds currency outflows

( more money in than out )

24
Q

Marginal propensity to import ?

A

The proportion of an increase in income that’s spent on imports

25
Q

Fisical policy

A

Control of taxation and government spending

26
Q

Monetary policy

A

Based on control of Intrest rates ,money supply and exchange rates

27
Q

Expansionary

A

Promotes economic growth by increasing AD , increasing GDP

28
Q

Loosening

A

Spending more

29
Q

Contractionary

A

Reduces AD to combat demand pull inflation

30
Q

Tightening

A

Spending less

31
Q

Pro cyclical

A

Works in line with business cycle

32
Q

Counter cyclical

A

Works against business cycle

33
Q

Progressive tax

A

Takes higher proportion of high earners income

34
Q

Proportionate tax

A

Takes same percentage of income

35
Q

Regressive tax

A

Low earners paying higher proportion of income tax

36
Q

Direct tax

A

Paid directly to individuals or organisation , tax on wages / salaries

37
Q

Indirect tax

A

Tax on goods and services

38
Q

Budget deficit

A

Govement spend more than they make

(National debt increases)

39
Q

Budget surplus

A

Govement make more than they spend
(National debt decreases )

40
Q

Balanced budget

A

Tax revenue = government spending

41
Q

Discretionary fisical policy

A

Gov makes conscious decision to change taxes or government spending

42
Q

Free market supply side policy

A

Policies designed to increase productive capacity by reducing government Involvement

43
Q

Interventionist side policy

A

Increase productive capacity by increasing the role of the government

Eg subsidy

44
Q

Long run economic growth

A

Increase in real G.D.P caused by an increase in productive capacity

45
Q

Short run economic mimic growth

A

Increase in G.D.P caused by an increase use of it productive capacity (i.e increase in AD)

46
Q

Shifts AD

A

Demand side policies

47
Q

Shifts LRAS

A

Supply side policies

Change in Q/Q/T of F.O.P

48
Q

Shifts SRAS

A

Changes in c.o.p

Price of raw materials

Eg indirect taxes / wages

Macroneconomic Booklet 3 (10 decks)

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