Definitions Flashcards

1
Q

national debt

A

total stock of gov debt over time

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2
Q

bop

A

measures inflows and outflows of money into and out of a country

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3
Q

accelerator effect

A

changes in investment can be directly linked to changes in the rate of gdp growth

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4
Q

economic integration / trading bloc

A

process whereby countries coordinate to reduce trade barriers and increase trade between themselves

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5
Q

bilateral/multilateral trade agreement

A

agreement to reduce trade barriers between 2/multiple countries

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6
Q

bilateral aid

A

when aid is given from one gov to another gov directly

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7
Q

investment

A

when firms spend money (on capital goods) to increase their efficiency/productive capacity

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8
Q

economic growth

A

an increase in real gdp in an economy in a year caused by an increase in ad or lras

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9
Q

pta

A

countries join together to reduce tariffs/quotas but only on certain g/s
eg eu and african Caribbean countries

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10
Q

full economic integration

A

countries completely harmonize all policy (fiscal+monetary) + political power under one governing body
eg uk

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11
Q

fta

A

countries join together and eliminate all trade barriers between each other, but they are free to trade w any other country outside the fta
eg NAFTA

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12
Q

customs union

A

countries join together and eliminate all trade barriers between each other, and impose a common external barrier (eg tariff) on countries outside the union
eg eu

fta but w/o freedom of trade w countries outside union

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13
Q

common/single market / economic union

A

countries join together and eliminate all trade barriers between each other along w complete free movement of fops, and impose a common external barrier (eg tariff) on countries outside the union

customs union but w complete free movement of fops

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14
Q

monetary union

A

economic union/common/single market

countries join together and eliminate all trade barriers between each other along w complete free movement of fops, and impose a common external barrier (eg tariff) on countries outside the union.

also adopt same currency, central bank and therefore same monetary policy

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15
Q

diversification

A

moving away from primary product dependence and into manufacturing

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16
Q

systemic risk

A

risk that collapse of one financial institution could lead to entire financial system collapse

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17
Q

Negative output gap

A

where actual output is less than potential output

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18
Q

+ output gap

A

where actual output is greater than potential output

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19
Q

near money

A

non cash assets which can be quickly converted into cash
eg bonds

20
Q

liabilities

A

anything that is not owned and owed to someone else

21
Q

automatic stabilisers

A

fiscal policy tools to influence gdp and counter fluctuations in the economic cycle

22
Q

protectionsism

A

any barrier that restricts free trade taking place between nations

23
Q

wto

A

int org that regulates world trade

24
Q

international competitiveneess

A

the ability of a nation to compete successfully overseas and sustain improvements in living standards + output

25
bond
a piece of paper that guarantees the owner of the bond yearly couponn payments and the face value of the bond back when it matures
26
occupational immobility
skills mismatch between skills that workers have and job vacancies that exist
27
seasonal u
temporary fall in d for workers eg ice cream, tourism, skiing
28
market making
place where financial assets can be bought and sold on behalf of lenders + borrowers
29
gni
total income generated by a country's fops, regardless of where they are located gni = gdp + net factor income (y earnt by domestic workers - y earnt by foreign workers)
30
Yfe
the max level of output an economy can produce using all fops at sustainable levels
31
Inflation
Sustained rise in the average p of g/s in an economy over a period of time reducing purchasing power
32
Structural u
Immobility of labour due to a lt change in the structure of an industry
33
Ad
Total d for a country’s g/s at a given pl in a given time period =C+g+i+(x-m)
34
Bank run
Not enough liquid st assets to meet st liabilities
35
Globalisation
The process by which national economies become increasingly integrated and interdependent
36
Monetary policy
Changes to the ir sm and ex rate by the central bank to influence ad
37
Fishers eqn of exchange
Money s x velocity of circulation = q of final g+s sold in an economy x average p of g+s sold in an economy M=p as v+q don’t change st So only changes in m will affect i
38
Money markets eg
Gov bonds Interbank lending
39
Multiplier
Any change to components of ad will have an even greater change in national output
40
Marginal propensity to consume
The willingness of a household to spend any extra y that they earn
41
Fiscal/budget surplus/deficit
When t >< g in a year
42
Market bubble
Where the p of assets are much greater than the assets true worth
43
Multi national corp
Firms which function in at least one other country aside from their country of origin
44
Sustainability
Meeting the needs of the present generation without reducing the ability of future generations to meet their own needs
45
M sub
Tariffs on m manufactured goods to allow domestic industries to grow
46
Trade creation
Movement from a high cost domestic/foreign producer to a low cost producer inside the customs union