Keywords Flashcards
Accelerator
A change in the level of investment into capital goods, brought about by a growth of aggregate demand
Actual output
Level of actual output produced in the
economy in a year
Aggregate demand
total demand for final goods and services in an economy at a given time
Aggregate Supply
total supply of goods and services that firms in a national economy plan on selling during a specific time period
Autonomous consumption
The minimum level of consumption in society needed to
sustain a basic standard of living
Boom/Bust Policy
When the government enacts policies to stimulate then contract the economy
Circular flow of income
The circulation of national income, output and expenditure
between economic agents, such as firms and households
Credit crunch
Low availability of credit; when borrowing becomes (significantly) more expensive
Full Employment income
Total output of an economy when output is minimised
Funding for Lending Scheme (FLS)
Scheme allowing banks to borrow cheaply from the Bank of England, on the condition that they lend the money out to promote economic growth
Gross Domestic product (GDP)
The sum of all goods and services produced in an economy over a period of time
Injection
Spending power entering the circular flow of income resulting from investment, government spending and exports
Keynesian economists
Followers of the economist John Maynard Keynes, who believe the government should generally manage the economy
Long run aggregate supply (LRAS)
Aggregate supply when the economy produces its productive potential
Monetarists
Economists who believe increases in the money supply is a significant factor of inflation
