Economic Factors Flashcards
What are macroeconomics?
The study and analysis of the behaviour of the whole economy
What is the economy?
The collective behaviour of a number of different groups groups such as businesses, people as employees and customers, and the government
What is GDP (gross domestic product)?
The total value of all of the economy’s output
What is economic activity?
The level of output in all sectors of the economy (primary, secondary and tertiary)
What is the circular flow of income?
The continuous flow of income from businesses to households as payment for work, and from households to businesses as payment for products
What are imports?
Purchases of goods from abroad
What are leakages?
Income that leaves the economy and does not go back into the circular flow of income
What are injections?
Income coming into the UK economy (not from UK households)
What are exports?
The sales of goods to other countries by UK businesses
What is investment?
The purchase of capital equipment/buildings by businesses
What is inflation?
Persistent general tendency of prices in the economy to rise
What is economic growth?
An increase in the volume of goods and services (GDP) produced each year
What is the balance of trade?
Difference between the value of exports and imports. If exports exceed imports, there is a balance of trade surplus. If the other way round, there’s a deficit
What is the multiplier? (the multiplier effect)
The effect of changes in economic activity in one sector on other sectors
