key terms Flashcards
what is AD
the total value of spending on domestically produced goods and services over a given period of time
what is consumption
spending by consumers on domestically produced goods and services
what is investment
spending by firms on capital goods
what is (X-M)
the balance of trade with other countries
what is AS
total output from all producers in an economy at a given time at various price levels
what is macroeconomics
the study of the economy as a whole with overall levels of supply and demand accounted for
what is the multiplier effect
a situation whereby a change in any component of AD leads to a bigger overall change in the economy
what is the output gap
the difference between potential and actual output
what is the labour force
those who are economically active
what is a defecit
when there is more outflow than inflow
what is the exchange rate
the price of one currency in terms of another
what is international trade
exchange of goods and services across national boarders
what is a tariff
tax on imports
what is a quota
a limit on imports
what is real gdp
the total value of goods and services produced in a country at a given time
what is cyclical unemployment
skills but no job due to contractions in the economy
what is seasonal unemployment
due to seasonal trends
what is structural unemployment
eliminate and makes jobs
what is regional unemployment
when unemployment is high in a specific region (i.e.- due to factory closure)
what is technological unemployment
due to mechanisation
what is international unemployment
due to outsourcing
what is frictional unemployment
when somebody is between jobs
what is search unemployment
when someone is looking for a better job
what is casual unemployment
when somebody partakes in irregular contracts
what is inflation
a sustained rise in the general level of prices to reduce the purchasing power of money
what is CPI
consumer price index- indications of how prices have changed since the same month in the previous year
what is deflation
a sustained decrease in general prices
what is the balance of payments
a record of the UK’s financial transactions with the rest of the world
