Lecture7 - Aggregate demand and the national economy Flashcards
What is national output?
The total amount produced in a country in a given year
What is economic growth?
the % increase in output between two given moments of time typically over 12 months
What is the real economic growth?
The actual growth in all production output
What is GDP?
The value of output produced within a country, typically over a 12 month period
What are the four major economic issues?
- Unemployment
- Economic growth
- Inflation
- Balance of payments
What is the order of the business cycle?
Upturn - Expansion - peaking out - slump/recession
What is unemployment?
-People of working age who are without work, but who are available for work at the current wage rates
What is meant by underemployment?
- People working fewer hours then they would like at the current wage rate
What is inflation? and whats the target rate for uk?
the percentage increase in prices over a 12 month period
- 2%
What are the two ways that inflation is measured?
- Consumer price index
- Retail price index
What are debits?
Payments to other countries
What are credits?
Receipts from other countries
What is an exchange rate?
The rate at which a currency can be exchanged for other countries
