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Macro econ > General concepts > Flashcards

General concepts Flashcards

1
Q

definition Macroeconomics

A

studies the aggregate behaviour and performance of an economy

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2
Q

Economic agents

A

consumers, companies, government and foreign country

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3
Q

Definition Macroeconomic equilibrium

A

equilibrium on all markets

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4
Q

define ‘all markets’

A
  • goods market
  • labour market
  • money market
  • financial market
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5
Q

Definition Gross Domestic Product

A

Total value of all final goods and services within a specific period in a specific area

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6
Q

Is GDP a perfect indicator of well-being? and why?

A

No, because is does not capture things such as income inequality, human rights, gender inequality, environment. Plus it remains an average

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7
Q

define a budgetary policy

A

Taxes and expenses of a country which influences demand. (taxes or government spending)

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8
Q

define a monetary policy

A

CB strives for price stability through for example the monetary base

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9
Q

what does an exchange rate policy?

A

stabilise exchange rate with the interest rate

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10
Q

what shows GDP in the long run

A

GDP shows an upward/increasing trend over time. Income and living standard increase as well

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11
Q

What shows GDP in the short run

A

GDP shows business cycles of various lengths and magnitudes with booms and recessions

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12
Q

Formula GDP growth rate

A

(Yt - Yt-1) - 1

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13
Q

Formula %Y growth

A

(Ln Yt - Ln Yt-1) * 100

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14
Q

Formula Long run growth

A

= average growth
= ((Ln Yt - Ln Yt-1) / (T-1) ) * 100

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15
Q

Formula difference short run % current y and trend y

A

(Ln Yt - Ln Ttrend,t) * 100

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16
Q

Factors of distribution

A

labour and capital

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17
Q

define hyperinflation

A

if average price increases with more than 50%

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18
Q

is inflation procyclical or anticyclical ?

A

Procyclical

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19
Q

real economy

A

production and consumption of goods and services

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20
Q

how can Financial markets influence the real economy?

A
  1. Investments by companies
  2. Financial markets depend on consumption
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21
Q

Formula Economic Openness

A

(Export + Import) / GDP

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22
Q

Is GDP Procyclical or anticyclical?

A

Procyclical

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23
Q

what does a Burns-Mitchell Diagram?

A

show if a variable is procyclical or anticyclical

24
Q

Leading variable

A

can be used to predict (unemployemnt)

25
Q

Lagging variable

A

cannot be used to predict (inflation)

26
Q

is unemployment procyclical or anticyclical?

A

anticyclical

27
Q

formula unemployment rate

A

unemployment / labour force

28
Q

Define flow variable

A

measured over time

29
Q

name 3 flow variables

A
  • GDP
    -investments
    -wages
30
Q

define stock variable

A

Measured at one point

31
Q

Name 2 stock variables

A
  • capital
  • wealth
32
Q

Three approaches to defining GDP

A
  • expenditure
  • produciton
  • income
33
Q

three definitions GDP

A
  • all final sales
  • total value added
  • sum of incomes
34
Q

what does GDP not measure

A
  • (at )home production
  • shadow + underground economy
35
Q

formula GDP deflator

A

= nominal GDP / Real GDP = p

36
Q

What does the GDP deflator measure?

A

The GDP Deflator measures price output relative to the base year

37
Q

Difference between nominal GDP and real GDP

A

nominal GDP -> growth and output
Real GDP -> output

38
Q

Formula GDP deflator inflation

A

growth deflator -> difference nominal % - differen real %

39
Q

Consumer Price Index

A
  • general level of price consumers pay
  • basket of goods
  • changes in cost of living
40
Q

GNI

A

activity of residents

41
Q

Balance primary international income

A

income earned resident - non resident income

42
Q

Balance secondary payments Income

A

Foreign payments without consideration

43
Q

IAB (=0)

A

Primary + secondary income

44
Q

Accounting Identity

A

Y = C + I + G + X - Z
Y = C + S + T

45
Q

private sector (S-I) > 0

A

saver

46
Q

private sector (S-I) < 0

A

borrower

47
Q

Government (S-I) > 0

A

saver

48
Q

Government (S-I) < 0

A

borrower

49
Q

X- Z > 0

A

net exporter, lender

50
Q

Current Account

A

Export + imports and international receipts

50
Q

X -Z < 0

A

Net importer, borrower

51
Q

Components current account

A

trade balance (X-Z)
Balance International Income

52
Q

Financial account

A

transactions financial assets

53
Q

components financial account

A

Non-offical FA
official Intervention

54
Q

statistical discrepancy

A

captures eroors in Balance of Payments

Macro econ (2 decks)

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