GOOD macroeconomic definitions Flashcards
Define the circular flow of income?
The movement of spending and income through an economy
define economic growth
the expanison of the productive capacity of a country
Define GDP?
GDP is the total value of output of goods and services in an economy in a given time period.
Define Nominal GDP?
The value of national output measured at current prices
Define Real GDP?
The adjust value of national output measured at constant prices, adjusted for inflation.
Define Inflation?
A general and persistent rise in the price level
Define inflation rate?
A general and persistent rise in the price level, measured as a percentage.
Define demand-pull inflation?
Demand-pull inflation is when demand rises but supply is inadequate to meet that demand.
What is cost push inflation?
When a rise in the cost of production is passed onto the consumer
Define unemployment?
Where an individual does not have a job and is willing and able to work.
Define unemployment rate?
the number of people unemployed as a percentage of the number of people who are economically active
Define cyclical or demand-deficient unemployment?
unemployment caused by a lack of aggregate demand in the economy in accordance with changes in the economic cycle
Define structural unemployment?
Unemployment caused by changes into he pattern of global supply and demand that mean that labour in a particular industry is no longer required
Define Frictional unemployment?
Short-term unemployment that occurs when workers are between jobs
Define technological unemployment?
Unemployment caused by capital replacing labour in a particular industry or occupation
Define disequilibrium unemployment?
A situation where wages rise without any changes in supply or demand
Define Balance of Payments?
A record of all movements of money between an economy and the rest of the world
Define exchange rate?
An exchange rate is the price of a currency measured in terms of some other currency.
Define Aggregate Demand?
The total demand for goods and services in an economy at a given price level in a given time period.
What is Marginal Propensity to Consume (MPC)?
The percentage of extra income spent.
Define investment?
Spending by firms on capital goods
Define aggregate supply?
The total amount that producers in an economy are willing and able to supply at a given price level, in a given period of time.
Define Fiscal Policy?
A collection of policies about government decisions and actions on taxation and government spending, and government borrowing.
Define a time lag?
-The time between the occurrence of the problem and the desired effect of a policy applied to it
Define the government’s budget?
The difference between a government’s income and its spending
Define monetary policy?
Government decisions which control the supply of money
Define Supply side policy?
Any government action aimed at increasing the productive capacity of a country
Define International Trade?
The exchange of goods and services between countries
Define Protectionism?
Protecting the market share and employment in domestic industries by restricting/reducing the quantity of imports
