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
