Brainscape's Knowledge GenomeTM

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


See full index

H2 Economics > General Macroeconomics > Flashcards

General Macroeconomics Flashcards

1
Q

Marshall Learner Condition

A

Currency deprivation only corrects a current account deficit if:
PEDx + PEdm > 1
(Sum of price elasticity of X & M > 1)

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

Current account componenets

A

Goods, services, income and current transfers

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

Macro goals

A

TIGERS:
Trade
Inflation
Growth
Employment
Redistribution of income
Stability

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

Fiscal policy

A

Changes in government spending & taxation in order to influence AD

  • Reduces DD deficient unemployment (expansionary)
  • Reduces budget deficit/government debt (contractionary)
  • Shifts AD only
  • Causes DD pull inflation, trade deficit
  • Crowding out effect
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Monetary policy

A

Changes to IR, the money supply (and by extension the exchange rate) by the central bank in order to influence AD

  • Affects inflation more effectively
  • Prevent credit bubbles (contractionary)
  • Reduces BOT deficit (contractionary)
  • Shifts AD only
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Supply side policy

A

Increasing education, infrastructure or foreign workers
Reduce taxes, labour market reforms and policies to promote competition

  • Aims to increase productive capacity (AS)
  • Long gestation period
  • No guarantee for success
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Crowding out effect

A

Excess government spending leads to government borrowing all the loanable funds. As supply of loanable funds fall, interest rates increases, firms cannot invest and are crowded out.

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

Credit bubble

A

Credit bubbles involve a sudden surge in consumer or business loans, debt instruments, and other forms of credit. (Excessive borrowing)

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

Wage price spiral

A
  • DD pull inflation
  • Consumers purchasing power falls
  • Unions push for higher wages
  • Cost push inflation
  • Fall in national output
  • Government implements policy to increase AD; GPL increases
  • 2nd round of wage push by unions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Disinflation

A

Positive but declining inflation

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

Mild inflation

A

0-3%

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

Moderate inflation

A

4-10%

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

Galloping inflation

A

> 10%

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

Hyper inflation

A

> 50%

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

Imported inflation

A

Increase in prices of imported key factors of production

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

Demand pull inflation

A

Increase in AD while economy is operating near or at Yf

17
Q

Δ Real GDP per capita

A

ΔGDP - Δ Population - Δ Inflation

18
Q

Purchasing Price Parity

A
  • A measure of the price of specific goods in different countries
  • Used to compare the absolute purchasing power of the countries’ currencies
19
Q

Injections

A

Loans from banks, government expenditure and export revenue

always towards firms

20
Q

Withdrawals

A

Net savings to banks, taxes to governments and import expenditure

always from households

21
Q

Sustainable growth

A

AG + PG without decrease the ability of future generations to meet their needs and wants

22
Q

Hysteresis effect

A

Loss of skills due to prolonged unemployment will lead to further unemployment (impacts size of labour force)

23
Q

Ways to measure level of education

A
  1. PISA score
  2. Literacy rate
  3. Mean years in schooling
  4. Number of universities
24
Q

Ways to measure level of healthcare

A
  1. Life expectancy
  2. Infant mortality rate
  3. Ambulance response time
  4. Bed occupancy ratio
  5. Median hospital wait time
25
Q

Consumer Price Index

A

Weighted average price of basket of consumer goods

26
Q

SOL calculation/measurement problems

A

SOL understated since:
1. Non-market activities
2. Underground activities
are unaccounted for

27
Q

SOL comparison/interpretation problems

A

SOL overstated due to
1. Inequity
2. Externalities
3. Trade off with leisure time

28
Q

Common macro policy evaluations

A
  1. Difference in relative significance of C, I & G in AD
  2. Size of multiplier
  3. Expectation (future state of economy)
  4. Current state of economy (Is economy at Yf?)
  5. Government budget position (crowding out effect)
29
Q

Trade dependency ratio

A

(X+M) / GDP

30
Q

Beggar thy neighbour policies

A

policies that a country enacts to address its economic woes that, in turn, actually worsen the economic problems of other countries

31
Q

How to choose R1&2

A
  1. Internal vs External
  2. DD vs SS
  3. Context
  4. Example
  5. Area available for analysis (eg diagram)
32
Q

Elements of a topic sentence

A
  1. Signposting
  2. Clearly indicate scope
  3. Location/Country
  4. Clearly state point & economic framework
  5. Contextualise
33
Q

Policies that affect both X&M

A
  1. Currency appreciation/depreciation
  2. Change in CA
  3. Inflation
  4. Change in quantity and quality of G&S
  5. Rate of growth
  6. Unfair trade practices

H2 Economics (5 decks)

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