definitions section 2 Flashcards
real GDP
total monetary balue of the goods and services produced by and economy adjusted for inflation
economic development
improvements in the quality of life within a country
disinflation
when the price level is increasing but the inflation rate is falling
geographical immobility of labour
when workers are not willing or able to move from region to region to find work
occupational immobility
the inalbility of labour to move from one type of job to another
what is the labour force survey
questionnaire carried out every three months and sent to over 40,000 households about their employment status
claimant count
specific to the UK measures those claiming job seekers allowance benefits payments
what is the difference between the claimant count and the labour force survey?
LFS is a more accurate reflection of the unemployment statistics as most people don’t bother applying for their JSA as it is a lengthy process and it has a stigma around it.
balance of payments current account
record of all transactions made between economic agents in one country and the rest of the world over a certain period
primary income
covers amounts paid and received as income from providing factors of production in other countries
secondary income
covers transfers which are defined as transfer payments there is no expectation of a service in return
income inequality
when levels of income are unevenly distributed within an economy
wealth inequality
when levels of wealth are unevenly distributed within an economy
absolute poverty
<$2.15 a day
relative poverty
making less than 60% of the median income in an economy
what does NAIRU stand for?
non-accelerating inflation rate of unemployment
natural rate of unemployment
the typical rate of unemployment created by market forces
what does NAIRU mean?
the lowest unemployment rate that can be sustained without causing wages to grow and inflation to rise
money illusion
where individuals focus on nominal levels of income and wealth
how to calculate the Balance of payments
current account+ capital account + financial account=0 (must balance)
how to calculate balance of payments current account
balance of trade in goods + services + balance of primary income + balance of secondary income
