Key terms 1 Flashcards
Aggregate demand
Total demand in the economy made up of consumption,investment,government expenditure and net exports
C+I+G+(X-M)
Aggregate supply
The total value of goods and services supplied in the economy
Economic growth
The capacity of the economy to produce more goods and services over time
Gross domestic product
The total value of goods and services producess in the economy
Negative output gap
Where the economy is producing less than its trend output
Positive output gap
When actual GDP exceeds trend GDP increasing inflationary pressure
Trade-off
Where one macroeconomic objective has to be curtailed in favour of another object
Imports
Goods or services purchased from abroad
Exports
Goods or services sold abroad
Exporting
The scale of goods or services to a forign country-generates income for the home country
Importing
The purchase of goods and services from abroad, leads to expenditure for the home country
Economic indicators
Economic statistics that provide information about the expansions and contractions of business cycles
Nominal Gdp/Nominal national income/nominal output
GDP/income/output figures not adjusted for inflation
GDP per capita
GDO divide by the population-a measure of living standards
Index numbers
A weighted average of a group of items compared to a given base value of 100
