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CFA L1 COPY > Economics: Macroeconomics > Flashcards

Economics: Macroeconomics Flashcards

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CFA flashcards
1
Q

Aggregate Demand

A

The quantity of goods and services that households, businesses, government and foreign customers want to buy at any given level of prices

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2
Q

Aggregate Demand Curve

A

Inverse relationship between the price level and real output

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3
Q

Aggregate Income

A

The value of all the payments earned by the suppliers of factors used in the production of goods and services

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4
Q

Aggregate Outcome

A

The value of all the goods and services produced in a specified period of time.

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5
Q

Aggregate Supply

A

The quantity of goods and services producers are willing to supply at any given level of price

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6
Q

Aggregate Supply Curve

A

The level of domestic output that companies will produce at each price level

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7
Q

Balance of trade deficit

A

When the domestic economy is spending more on foreign goods and services than foreign economies are spending on domestic goods and services

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8
Q

Capital Consumption Allowance

A

A measure of the wear and tear (depreciation) of the capital stock that occurs in the production of goods and services

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9
Q

Capital depending investment

A

Increases the stock of capital relative to labor

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10
Q

Capital Stock

A

The accumulated amount of buildings, machinery, and equipment used to produce goods and services.

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11
Q

Convergence

A

The tendency for differences in output per capita across countries to diminish over time; in technical analysis, a term that describes the case when an indicator moves in the same manner as the security being analyzed

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12
Q

Cyclical Companies

A

Companies with sales and profits that regularly expand and contract with the business cycle or state of economy

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13
Q

Defensive Companies

A

Companies with sales and profits that have little sensitivity to the business cycle or state of the economy

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14
Q

Diminishing Marginal Productivity

A

Describes a state in which each additional unit of input produced less output than previously

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15
Q

Fiscal Policy

A

The use of taxes and government spending to affect the level of aggregate expenditures

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16
Q

GDP Deflator

A

A gauge of prices and inflation that measures the aggregate changes in prices across the overall economy

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17
Q

Gross domestic product

A

The market value of all final goods and services produced within the economy in a given period of time (output definition) of, equivalently, the aggregate income earned by all households, all companies and the government within the economy in a given period of time (income definition)

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18
Q

Implicit price deflator for GDP

A

A gauge of prices and inflation that measures the aggregate changes in prices across the overall economy

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19
Q

Inflation

A

The percentage increase in the general price level from one period to the next; a sustained rise in the overall level of prices in an economy.

20
Q

Interest

A

Payment for lending funds

21
Q

Inventory Investment

A

Net change in business inventory

22
Q

Labor force

A

The portion of the working age population (over the age of 16) that is employed or is available for but not working (unemployed)

23
Q

Labor productivity

A

The quantity of goods and services (real GDP) that a worker can produce in one hour of work.

24
Q

Marginal propensity to Consume

A

The proportion of an additional unit of disposable income that is consumed or spent; the change in consumption for small change in income.

25
Q

Marginal propensity to save

A

The proportion of an additional unit of disposable income that is saved (not spent).

26
Q

Monetary Policy

A

Actions taken by a nations central bank to affect aggregate outcome and prices through changes in bank reserves, reserve requirements, or its target interest rate.

27
Q

National Income

A

The income received by all factors of production used in the generation of final output. National income equals gross domestic product (or, in some countries, gross national product) minus the capital consumption allowance and a statistical discrepancy.

28
Q

Nominal GDP

A

The value of goods and services measured at current prices

29
Q

Non-renewable resources

A

Finite resources that are depleted once they are consumed such as oil and coal

30
Q

Per Capita real GDP

A

Real GDP divided by the size of the population, often used as a measure of the average standard of living in a country.

31
Q

Personal disposable income

A

Equal to personal income less personal taxes

32
Q

Personal Income

A

A broad measure of household income that includes all income received by households, whether earned or unearned; measures the ability of consumers to make purchases.

33
Q

Potential GDP

A

The level of real GDP that can be produced at full employment; measures the productivity capacity of the economy

34
Q

Production Function

A

Provides the quantitative link between the levels of output that the economy can produce and the inputs used in the production process.

35
Q

Productivity

A

The amount of output produced by workers in a given period of time - for example, output per hour worked; measures the efficiency of labor.

36
Q

Profit

A

The return that owners of a company receive for the use of their capital and the assumption of financial risk when making their investments.

37
Q

Real GDP

A

The value of goods and services produced, measured at base year prices.

38
Q

Real interest rate

A

Nominal interest rate minus the expected rate of inflation

39
Q

Recession

A

A period during which real GDP decreases (is negative growth) for at least two successive quarters, or a period of significant decline in total output, income, employment and sales usually lasting from six months to a year.

40
Q

Renewable resources

A

Resources that can be replenished, such as a forest

41
Q

Rent

A

Payment for the use of property.

42
Q

Stagflation

A

When a high inflation rate of combined with a high level of unemployment and a slowdown of the economy

43
Q

Sustainable rate of economic growth

A

The rate of increase in the economy’s productive capacity or potential GDP.

44
Q

Technology

A

The process a company uses to transform inputs into outputs

45
Q

Total Factor productivity

A

A scale factor that reflects the portion of growth that is not accounted for by explicit factor inputs (eg capital and labor)

46
Q

Wealth effect

A

An increase (decrease) in household wealth increases (decreases) consumer spending out of a given level of current income.

CFA L1 COPY (50 decks)

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