Brainscape's Knowledge GenomeTM

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


See full index

The International Economy > Economic Performance > Flashcards

Economic Performance Flashcards

1
Q

short run growth

A

using existing resources more efficiently

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

what is long run growth

A

when there is sustained improvement in quantity or quality of the FOP leading to increase in production over a period of time

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

factors of long run growth

A

technological advancements
investment in human capital
capital accumulation, instutional and policy factors, pop. growth and R&D

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

how can demand side growth be shown

A

the PPF curve

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

how to illustrate long run economic growth

A

the LRAS shifting right ( A change to the quantity/quality of the factors of production has increased potential output of the economy from YFE→YFE1)

and PPF curve shifting outwards ( caused by an increase in the quality or quantity of the available factors of production eg quality can be improved through training labour force leading to more productivity)

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

Benefits of economic growth

A

Increased employment
Higher GDP= Increase standard of living
facilitate investment on infrastructure
more competitive= better quality, innovation more consumer choice

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

costs of economic growth

A

negative externalities
depletion of natural resources
unequal distribution of wealth
not evenly distributed

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

impact of economic growth(EG) on indvdls

A

EG can lead to higher income levels for individuals. with businesses expanding and creating or jobs opportunities ppl will gain rising wages but it may not be evenly distributed if ur alr a higher income indvdl with assets might gain significant compared to poor growth leading to big difference between poor and rich

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

impact on economic growth on the economy

A

higher employment rates, improved standards of living , increased investment in education

However, can lead to inflation making exports more expensive reducing competition in global markets

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

impact of economic growth on the environment

A

negative externalities: increased air pollution and plastic waste

depletion of resources harms ecosystems and bio diversity
more waste levels and poor management could lead to env. damage

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

what is the economic cycle

A

refers to the changes in real GDP that occur in an economy over time.

represents the actual growth and fluctuations in economic activity.

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

four points in the cycle

A

boom recession slowdown recovery

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

diagram of economic cycle

A

one squiggly line repreents real gdp and one straight line called potential gdp

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

what is a positive output gap

A

growth of real GDP that is above the trend

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

what is a negative output gap

A

growth of GDP that is below the trend

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

chararcteristics of a boom

A

high rates of economic growth
reduction of negative output gap
reducing unemployment
higher confidence
improved gov budget

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

characteristics of a recession

A

two or more consecutive negative economic growth
high unemployment
increasing negative output gap
spare production capacity
low inflation
low confidence

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

an indication of a positive output gap

A

rapidly increasing prices

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

an indicator of negative gap increasing

A

rising unemployment and a slowdown on economic growth

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

diagram of negative output gap

A

when it produces below the equilibrium

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

positive output gap

A

when the economy is operating beyond its full potential

cause because workers are willing to work overtime to reach full capacity however not sustainable and will return to full employemnt but at a higher price

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

Factors that Change the Phase of the Economic Cycle

A

economic shocks
herd behaviour when ppl copy other because they believe tha a collective one is more accurate/rational
excessive growth in credit and lvls in debt
asset price bubbles

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

definition of unemployment

A

of working age not working but actively seeking work

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

what is economically inactive

A

of working age but not working and not seeking work

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

what is involuntary unemployment

A

workers willing to worm at current market wage rates but no jobs available

26
Q

what is voluntary unemployment

A

workers choose to remain unemployed to reduce job offers

27
Q

types of unemployment

A

seasonal unemployment
frictional unemployment
structural
cyclical

28
Q

what is cyclical unemployment

A

lack of AD in economy normally during slowdowns or recession

29
Q

what is seasonal unemployment

A

when certain seasons come to an end and labour is not required till next szn

30
Q

what is frictional unemployment

A

when workers are between jobs

31
Q

what is structural unemployment

A

mismatch between jobs and skills in the economy
eg no longer a need for a specific type of worker

32
Q

what cases demand side unemployment

A

lack of AD and recession

33
Q

gov response to structural unemployment and if its a demand or supply side factor

A

supply side
retrain workers for correct areas

34
Q

gov response to seasonal unemployment and if its a demand or supply side factor

A

demand side
extend operational seasons
subside innovation

35
Q

gov response to frictional unemployment and if its a demand or supply side factor

A

supply side
implement retraining schemes
reduce workers search periods between jobs

36
Q

gov response to cyclical unemployment and if its a demand or supply side factor

A

demand side
take measures to stimulate AD
monetary & fiscal policy to counteract unemployment

37
Q

what is real wage unemployment

A

when wages are inflexible at a higher point than the free amrket equilibrium wage

caused by minimum wage laws
higher wages create excess supply of labour ( real wage unemployment)

38
Q

real wage unemployment diagram

A

like minimum price diagram

39
Q

what is natural rate of unemployment

A

refers to the level of unemployment that exists when the labour market is in equilibrium.
includes frictional and structural unemployment
seen as sustainable sine there is no pressure on payments

40
Q

the effects of unemployment on the government

A

less tax revenue
increased spending on benefits
increased spending on retraining

41
Q

the effects of unemployment on the economy

A

increased crime
vandalism
increased anti social behaviour
increased homelessness

42
Q

effects of unemployment on the individual

A

loss of income
health issues
mental instability
sense of failure

43
Q

effects of unemployment on firms

A

loss of sales rev
loss of output/production
changes the skill lvl in the economy

44
Q

what is imported inflation

A

price of imports increases leading to overall rise in the domestic price lvl

45
Q

what happens when global prices rises

A

increases costs for the UK affecting various sectors such as transportation and energy production

46
Q

what is commodity prices

A

something that is valuable

47
Q

two common sources of imported inflation in the UK

A

food and oil supplies

48
Q

factors in other economies that can affect inflation in the UK

A

exchange rates
economic growth in trading patterns
global shocks

49
Q

how economic growth in trading partners can affect uk inflation

A

strong economic growth in major trading partners may increase demand for UK exports

50
Q

how global shocks affect uk inflation

A

global shock eg wars natural disasters increase inflationary pressures

51
Q

result of reducing negative output gap

A

by stimulating demand leads lower unemployment but also inflation

52
Q

result of too much of positive output gap

A

lower inflation and higher unemployement

53
Q

what is the short run phillips curve (SRPC)

A

observes that there may be a trade off between unemployment and inflation

54
Q

the trade off in the SRPC

A

rising inflation = lower unemployment
rising unemployment = lower inflation

55
Q

what is the LRPC

A

suggest no trade off between inflation and unemployment

56
Q

what does LRPC represent

A

based on the idea natural rate of unemployment

represent lvl of unemployment consistent with non-accelerating inflation, meaning that further reductions in the unemployment rate cannot be achieved without generating inflationary pressures

57
Q

what type curve is the LRPC

A

vertical

58
Q

implications for short run policy decisions

A

that theres gna be trade offs

59
Q

trade off: high economic growth and inflation

A

high economic growth= FE
but inflation may exceeded target rate of 2%

60
Q

trade off: high economic growth and env. sustainability

A

economic can lead to negative externalities pollution and depletion non renewable resources

61
Q

implication of long-run policy

A

LRPC no permanent trade-off between unemployemnt and inflation
LR economy tends to return to its natural lvl of output

The International Economy (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions