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macro Economics > Key terms > Flashcards

Key terms Flashcards

1
Q

living standards

A

Living standards refers to the material wellbeing (purchasing power of income) and the non material well being of a consumer (such as healthcare and education)

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2
Q

what does GDP or national income mean

A

the total value of goods and services produced in an economy

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3
Q

Aid

A

money, goods or services given by the government to another

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4
Q

balance of payments

A

a record of all money flows or transactions between residents of a country and the rest of the world

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5
Q

balancing the budget

A

when the government aims for government spending to equal government tax revenue

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6
Q

Broad money (M4)

A

the part of the stock of money made up of cash or other liquid assets

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7
Q

capital markets

A

where securities such as shares and bonds are issued.

they are then traded second had on a stock exchange (LSE)

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8
Q

capital raion

A

the amount of capital on a banks balance as a proportion of its loans

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9
Q

comparative advantage

A

occurs when a country can produce a good at a lower opportunity cost

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10
Q

corruption

A

deals with the misuse of public power for private benefit and its negative economic impact on society

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11
Q

coupon

A

a fixed annual interest payments

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12
Q

currency union

A

when a group of countries share a common currency

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13
Q

current account.

A

measure all currency flows in and out of a country in a particular time period in payment for imports and exports

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14
Q

custom union

A

a trading bloc in which member countries enjoy internal free trade.

these members are protected by a common external tariff

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15
Q

cyclical budget deficit

A

when the budget deficit increases as a result of a fall in AD

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16
Q

deflation

A

the persistent fall in price levels over time and the increase in the value of money

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17
Q

disinflation

A

a fall in the rate of inflation but inflation still remains positive

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18
Q

economic growth

A

an increase in real GDP overtime

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19
Q

Eurozone

A

the name for the countries that replace their national currencies with the euro

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20
Q

exchange rate

A

the price of one currency in terms of another

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21
Q

expenditure reducing policy

A

a government policy which aims to reduce a current account deficit by reducing the demand for imports by reducing AD

22
Q

expenditure switching policy

A

a government policy which aims to reduce a current account deficit by making domestic product more attractive

23
Q

export subsidies

A

government grant given to firms to encourage the sale of their products abroad

24
Q

financial account

A

the part of the balance of payments that records capital flows into and out of the economy

25
Q

financial markets

A

markets in which financial assets and securities are traded

26
Q

Financial policy committee

A

the part of the Bank of England that is charged with the primary objective to identify, monitor and take action to remove the systemic sin to improve the resilience of the UK financial system.

27
Q

fiscal policy

A

the use of government spending and taxation to achieve governments policy objectives

28
Q

fixed exchange rate

A

when the value of a currency in terms of another is fixed by the government

29
Q

Foreign direct investment

A

investment into domestic capital done by an economic agent that operates abroad

30
Q

forward guidance

A

when a BOE attempt to send signals to the public sector about the interest rate policy in the coming years

31
Q

free floating exchange rate

A

when the value of a currency in terms of another is solely determined by market forces

32
Q

frictional unemployment

A

unemployment that occurs when people are in between jobs

33
Q

full employment

A

when the number of people wishing to work equals the number of workers who employees wish to hire

34
Q

globalisation

A

the process of growing economic integration of the worlds economies

35
Q

what is economic development

A

The process of improving people economic wellbeing and quality of life

36
Q

how is economic development measured

A

Uses HDI which takes into account:

  1. life expectancy
  2. mean and expected years of schooling
  3. Gross national income per capita.
37
Q

injections

A

(G). Government spending
(I). investment spending by firm son capital goods
(X). Exports

38
Q

liquidity

A

refers to the assets which can be turned into cash in short period of time without loss of value

39
Q

liquidity ration

A

ration of a banks cash and other liquid assets to its deposits

40
Q

Long run AS

A

the real output that can be supplied when the economy is on its production possibility frontier.

41
Q

what happens when an economy operates on its production possibility frontier

A

when all available factors of production are employed and producing at their normal capacity level of output

42
Q

long run (potential) economic growth

A

occurs when productive capacity increases

43
Q

monetary policy

A

implemented by the government (BOE) in order to achieve economic objective s such as controlling inflation

44
Q

moral hazard

A

the tendency of individuals or firms, once protected against a contingency are likely to act carelessly to make the contingency more likely

45
Q

QE

A

the Bank of England rebuying bonds from the private sector

46
Q

macro economics performance

A

achievement of key macroeconomic indicators

47
Q

purchasing power parity

A

The exchange rate that equalizes the purchasing power in two economies
It is calculated by comparing how much it costs to buy a common basket of goods in the two countries.

48
Q

development

A

improvement in quality of life (non material and material well being)

49
Q

how is HDI measured

A

mean years of schooling, expected years of schooling, life expectancy at birth, and gross national income (GNI) per capita.

50
Q

aggregate demand

A

total amount of money spent on those goods and services at a specific price level and point in time

macro Economics (8 decks)

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