Economic growth- unit 2 Flashcards
What are the government objectives? (6)
Full employment, price stability (low inflation), high (steady and sustainable) economic growth, balancing exports and imports, to reduce inequality, to protect the environment
What is GDP?
Gross domestic product - a measure of the value of output produced in the UK.
What is GDP per capita?
Output divided by population
What is economic growth?
An increase in real GDP over a period of time or an increase in the productive capacity of the economy.
What is circular flow of income?
The flow of money around an economy as it passes between consumers and producers.
Name 3 injections of money:
Investment, government spending and export expenditure.
Name 3 withdrawals of money:
Savings, taxation, imports expenditure
What is the Aggregate Demand formulae?
AD= C+I+G+X-M
What is Aggregate Demand?
Total planned expenditure in the economy
What is Aggregate Supply?
Total supply of goods and services that can be produced for given price levels.
What is the Economic cycle?
The tendency of the level of economic activity to fluctuate in a more or less regular manner, with periodic booms and recessions
Slowdown phase is:
A decreased rate of economic growth
Recession is:
GDP decreases for two or more consecutive quartiles
The recovery phase is:
When GDP starts to increase after a recession
What is a boom phase?
A relatively high increase of GDP
