Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Econmics > Econmics Year 1 Topic 2 > Flashcards

Econmics Year 1 Topic 2 Flashcards

1
Q

balance of payments accounts

A

A record of all financial dealings over a period of time between economic agents of one country and all other countries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

balance of trade

A

The value of visible exports minus visible imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Current account

A

That part of the balance of payments account where payments for the purchase and sale of goods and services are recorded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Current balance

A

The difference between the value of total exports and total imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Current account deficit

A

a deficit exists when imports are greater then exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

current account surplus

A

A surplus exists when the value of exports are greater then imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Invisibles

A

Trade in services, transfers of income and other payments or receipts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Visables

A

Exports or imports that are raw materials it crosses international boundaries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Foreign Direct Investment

A

An investment made by a firm or individual in one country into business interests located in another country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Investment income

A

The most common types of investment income are income on equity (dividends) and income on debt (interest)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Aggregate Demand

A

The total of all demands in the economy at any given price
C+I+G(X-M)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

consumption

A

using goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

disposable income

A

money left after taking out taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

durable goods

A

goods that last for a relatively long time such as a car

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

non-durable goods

A

goods that last a short period of time such as ice cream

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

investment

A

The addition to the capital stock of the economy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Retained profit

A

Profit which is kept back in the business and used to pay for investment in the business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

animal spirits

A

Business confidence: the mood of managers and owners of firms about the future of their industry and the wider economy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Accelerator theory

A

the theory that the level of investment is related to past changes in income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Gross National Product (GNP)

A

Is the total value of all the goods and services produced by a nation in a single year both domestically and overseas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Gross Domestic Product (GDP)

A

A measurement of the total goods and services produced within a country.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Gross National Income (GNI)

A

The value of the output of goods and services produced in a country in a year, including money that leaves and enters the country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

hidden economy

A

Economic activity where trade and exchange take place but which goes unreported to the tax authorities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

standard of living

A

How well off is an individual, household or economy, measured by variables such as income and health

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Boom or peak

A

Period of time when the economy is growing strongly and is operating above its productive potential

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Recession

A

Two successive quarters of reduced economic activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Demand-side shock

A

A sudden and large impact on aggregate demand.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Supply-side shock

A

A sudden and large impact on aggregate supply.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

anticipated inflation

A

Increases in prices which economic actors are able to predict

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

consumer prices index

A

A measure of changes in the price of a representative basket of consumer goods and services.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

cost-push inflation

A

inflation caused by increases in costs of production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

demand-pull inflation

A

Inflation which is caused by excess demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

hyper inflation

A

Large increases in the price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

unanticipated inflation

A

Increases in prices which economic actors failed to predict

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Price level

A

The average price of goods and services in the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Indexation

A

Adjusting the value of economic variables such as wages or the rate of interest in line with inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Active population

A

Those in work or actively seeking work also know as the labour force

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Cyclical or demand-deficient unemployment

A

Unemployment when an economy is not in a boom

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Employed

A

The number of people in paid work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

frictional unemployment

A

When workers are unemployed for short lengths of time between jobs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Inactive

A

The number of those not in work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Labour force

A

Those in work or actively seeking work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Real wage or classical unemployment

A

When workers are unemployed because real wages are too high and inflexible downwards, leading to insufficient demand for workers from employers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

seasonal unemployment

A

When workers are unemployed at certain times of the year, such as building workers or agricultural workers in winter.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

structural unemployment

A

unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Unemployed

A

Occurs when individuals are without a job but seeking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

The claimant count

A

A measure of unemployment that includes those receiving unemployment-related benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

LFS

A

LFS unemployment is calculated using labour force survey statistics.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Primary income

A

Balence of payments: Primary income is the net flow of profits, interest and dividends from investments in other countries

50
Q

Trade in goods

A

exports and imports of visible or tangible items such as car

51
Q

Trade in services

A

exports and imports of services such as financial services

52
Q

Secondary income

A

Part of BOP,government transfers to and from overseas agencies such as the EU

53
Q

surplus

A

An excess amount

54
Q

Under employment

A

Those who would work more hours if possible or are in jobs below skill level

55
Q

investment

A

The addition to the capital stock of the economy.

56
Q

Accelerator theory

A

the theory that the level of investment is related to past changes in income

57
Q

Trade liberalisation

A

Reduction of regulations for imports

58
Q

Protectionist policies

A

Increase of regulations for imports

59
Q

Tariff

A

Taxing items that come from abroad

60
Q

Quota

A

A limit placed on the quantities of a product that can be imported

61
Q

demand-pull inflation

A

Demand pull inflation occurs when the aggregate demand rises and there is no increase in aggregate supply

62
Q

Causes of demand pull inflation

A

Consumer spending may rise excessively or firms may substantially increase their spending on investment

63
Q

cost-push inflation

A

Cost push inflation occurs because of rising costs

64
Q

Causes of cost push inflation

A
  1. Rise in the costs of production
  2. Fall in the exchange rate
  3. Fall in productivity
  4. Increase in trade union power
65
Q

The costs of high inflation-
Growth and unemployment

A

Unanticipated inflation makes it difficult to plan for the future therefore little investment

66
Q

The costs of high inflation-
International Competitiveness

A

If inflation rises faster in the UK than in other countries the value of the pound doesn’t change on foreign markets therefore exports will become less competitive

67
Q

The costs of high inflation-
Redistributional costs

A

Inflation can redistribute income and wealth between households, firms and the state

68
Q

The costs of high inflation-
Psychological and political costs

A

People feel worse off even if they’re incomes rise more then inflation

69
Q

The costs of high inflation-
Shoe-leather costs

A

When prices aren’t stable firms and consumers are less clear what a reasonable price is.

70
Q

The costs of high inflation-
Menu costs

A

Restaurants have to change their menus to show increased prices

71
Q

Bottlenecks

A

Supply-side constraints in a particular market in an economy which prevent higher growth for the whole economy

72
Q

Deregulation

A

the process of removing government control from markets

73
Q

industrial policy

A

Government policy to promote and support individual firms which it considers are important for the growth of the economy

74
Q

Interventionist policies

A

Government policies designed to correct market failures that are reducing the growth rate of the economy

75
Q

Labour market flexibility

A

The degree to which demand and supply in a labour market respond to external changes to return the market to equilibrium

76
Q

Market-based policies

A

Government policies designed to promote economic growth by reducing barriers to the efficient working of free markets

77
Q

Privatisation

A

The sale of public sector organisations to the private sector

78
Q

Red tape

A

Rules and regulations issued by government which firms must adhere to operate legally

79
Q

Unemployment trap

A

Occurs when an individual is little better off or even worse off when getting a job after being unemployed because of the combined effect of increased tax and benefit withdrawal

80
Q

multiplier

A

1/(1-MPC)

81
Q

Marginal Propensity to Consume (MPC)

A

the increase in consumer spending when disposable income rises

82
Q

Marginal Propensity to Consume (MPC) equation

A

change in consumption/change in income

83
Q

Injections (part of the CIRCULAR FLOW MODEL)

A

Government spending, consumption and exports

84
Q

Leakages (CIRCULAR FLOW MODEL)

A

savings, taxes and imports

85
Q

monetary policy

A

the setting of the money supply by policymakers in the central bank

86
Q

fiscal policy

A

Government policy that attempts to manage the economy by controlling taxing and spending.

87
Q

Positive output gap

A

When actual GDP exceeds trend GDP

88
Q

Negative output gap

A

When actual GDP is below the tend GDP

89
Q

quantitative easing

A

when the central bank buys bonds from lower banks for cash to boost economic activity

90
Q

expansionary

A

involves cutting taxes and increasing government spending to encourage economic growth

91
Q

Contractionary

A

Policy implemented to decrease the money supply in an economy

92
Q

Fiscal deficit (Budget deficit)

A

When government spending is higher then receipts

93
Q

Purchasing Power Parity

A

an exchange rate of one currency for another which compares how much a typical basket of goods in one country costs compared to another country

94
Q

Gross National Income (GNI)

A

The value of the output of goods and services produced in a country over a period of time plus interest payment and dividends

95
Q

GNI is used to measure what?

A

Standerd of living

96
Q

Real or volume

A

Is adjusted to inflation

97
Q

Nominal or value

A

The value of the prices on the day

98
Q

Green GDP

A

A measure of the total output of an economy having taken into account the environmental externalities

99
Q

Disinflation

A

a reduction in the rate of inflation

100
Q

Deflation

A

a decrease in the general level of prices

101
Q

Stagflation

A

high inflation and high unemployment

102
Q

Deflationary policies

A

Reducing economic growth

103
Q

wealth effect

A

The tendency for people to increase their consumption spending when the value of their financial and real assets rises and to decrease their consumption spending when the value of those assets falls.

104
Q

Inflation

A

The general increase in the price level of goods and services

105
Q

Deflation

A

A sustained fall in the rate of inflation

106
Q

Comparing national income over time:

A

-prices
-accuracy
-changes in population
-quality of goods & services
-defence
-consumption & investment
-externalities

107
Q

Benefits to economic growth:

A

-higher life expectancy
-most people can read and write

108
Q

Negatives of economic growth:

A

-growth is unsustainable
-increasing inequality’s
-growth & happiness

109
Q

Negatives of economic growth:
Growth & happiness

A

They found income and happiness are positively related in low income but not high income.
So high income countries instead of increasing GDP should contribute to factors that make happiness:
Quality of relationships
Working less hours

110
Q

Negatives of economic growth: growth is unsustainable

A

-Increase in GDP is associated with pollution as we use lots of non renewables

111
Q

Direct tax

A

A tax levied onto a person or organisation

112
Q

Indirect tax

A

A tax on a good or service

113
Q

Marginal propensity to import

A

The increase in imports divided by the increase in income

114
Q

Marginal propensity to save

A

The increase in saving divided by the increase in income

115
Q

Marginal propensity to tax

A

The increase in tax revenues divided by the increase in income

116
Q

Marginal propensity to withdraw

A

MPS+MPT+MPM
Save+tax+import

117
Q

Net investment

A

Gross investment - depreciation

118
Q

National income

A

Total spending on goods and services

119
Q

Circular flow of income

A

Money flows around the economy between households and firms

120
Q

Market-based policies

A

Are designed to remove barriers to the efficient working of free markets

Econmics (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions