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economics ms khan theme 2 > Keywords > Flashcards

Keywords Flashcards

1
Q

What is economic growth

A

An increase in availability of goods and services in an economy measured by gdp

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2
Q

What is inflation

A

The increase general price level of goods and services

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3
Q

What is the claimant count

A

The job seeker’s allowance (benefit) gov pays when unemployed

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4
Q

Whats labour force survey

A

Survey for how many work

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5
Q

What is coorporation tax

A

Taxes on company’s profits

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6
Q

What is consumption

A

Total goods and services purchased by household in an economy at a given time period

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7
Q

What is investment

A

Purchase of machinery/equipment using capitsl

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8
Q

What is government spending

A

Total spending by public sector eg. Health etc

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9
Q

What is Aggregate supply

A

Total amount of goods and services produced

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10
Q

What is equilibrium

A

When AS= AD

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11
Q

What is interest rates

A

Cost of borrowing and reward for saving

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12
Q

What is exchange rate

A

Currency expressed in terms of another

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13
Q

What is the wealth effect

A

When assets appreciate in value leading to consumers “feeling rich” so consume more

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14
Q

What is negative wealth effect

A

When assets deppreciate in value so people feel poorer so consume less

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15
Q

What is Disposable income

A

Income after tax

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16
Q

What is wealth

A

Stock of assets

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17
Q

What is savings

A

Disposable income that is not spent

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18
Q

What is credit

A

Ability to obtain goods or services before payment, based on agreement to pay later

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19
Q

What is gross investment

A

Investment made on capital goods

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20
Q

What is net investment

A

Investment on capital goods , accounting for depreciation

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21
Q

What is accelerator effect

A

Increase in economic growth leads to larger proportionate rise in investment

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22
Q

What is subsidies

A

Government grant given to firms to encourage production

23
Q

What is unemployment trap

A

When people choose not to work due to welfare benefits

24
Q

What is investment-led

A

Economic growth caused by increase in investment(machinery)

25
Q

What is structural unemployment

A

Where workers are not working due to a lack of skills and qualifications

26
Q

What is positive output gap

A

When actual output is above full capacity output

27
Q

What is negative output gap

A

When actual output is less than full capacity output

28
Q

What is real income

A

How much income someone earns accounting for inflation

29
Q

What is competition policy

A

Policies to promote competition: such as lower prices which can encourage firms to invest in factors of production which can shift LRAS

30
Q

What is circular flow of income

A

Way of representing flows of money between two main groups in society - producers and consumers. Includes injection and withdrawals.

31
Q

What is injection in cicrular flow of income

A

Money(income) entering circular flow of income (households and firms)

32
Q

What are withdrawals in circular of income

A

Money leaving circular flow of income

33
Q

What is multiplier process

A

When an initial injection leads to a larger proportionate rise in economic growth

34
Q

Multiplier ratio

A

Ratio of the rise in national income to initial rise in AD

35
Q

Whats MPC

A

Proportion if extra income spent on consumption

36
Q

Whats MPS

A

Proportion of extra income that is saved.

37
Q

Whats MPM

A

Proportion of extra income thats spent in imports

38
Q

Whats MPT

A

Extra income spent on taxes

39
Q

What is nominal GDP

A

GDP without taking inflation into account

40
Q

What is Real GDP

A

GDP with inflation taken into account

41
Q

Whats GDP per capita

A

Measure of countrys output that accounts for its number of people

42
Q

Whats GNI

A

Gross national income =

Gross domestic product + net income from abroad

43
Q

Whats Purchasing Power Parity

A

PPP=

How much goods and servives would cost if countries used same currency.

44
Q

Whats Easterlin Paradox

A

The Easterlin Paradox is the observation that, despite increases in income, there may not be a corresponding increase in happiness or life satisfaction

45
Q

Whats real income

A

Income accounting for inflation

46
Q

What is deflation

A

Decrease in inflation

47
Q

Whats disinflation

A

Rise in inflation but at a slower rate

48
Q

Whats CPI

A

Gov creates basket of goods, works out an average price of each good and compares to a year ago to see inflation has occurred

49
Q

Whats RPI

A

CPI including housing costs

50
Q

Whats cost-push inflation

A

Inflation caused by a rise in cost of production

51
Q

Whats demand pull inflation

A

Inflation caused by a rise in AD

52
Q

Whats Fiscal drag effect

A

When worker’s real income is forced into higher tax brackets due to inflation

53
Q

Whats wage price spiral

A

A cycle of rising wages and prices

economics ms khan theme 2 (10 decks)

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