economics ggs

Question 1

Monetary policy

Answer 1

the use of money supply and interest rates to influence Aggregate Demand in order to achieve macreconomic growth

Question 2

recessionary gap occurs

Answer 2

when real output is below potential output.

Question 3

Economic growth

Answer 3

refers to the increase in National Income, which refers to the total output of goods and services in the economy, and the net factor of income irrespective of location.

Question 4

inflation

Answer 4

Inflation refers to the sustained rise in average price levels of an economy in a given period of time.

Question 5

Quantitative easing (QE)

Answer 5

where a central bank purchases amounts of government bonds or other financial assets in order to stimulate economic activity

Question 6

Unemployment

Answer 6

those who are able to and actively seeking work, but are unable to find work.

Question 7

Contractioanry fiscal poliy

Answer 7

when the government reduces spending and increases the taxes at the same time in the economy

Question 8

Recession

Answer 8

when there is a decrease in real GDP over two consecutive quarters

Question 9

Expansionary fiscal policy

Answer 9

when the goverment increases their spending and decrease tax rates in order to increase aggregate demand

Question 10

Deflation

Answer 10

a decrease in the general price level of goods and services