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Macro 1 > Macro 1.6 > Flashcards

Macro 1.6 Flashcards

1
Q

What is a policy objective?

A

A target or goal that the policy makers aim to achieve

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2
Q

What is a policy instrument ?

A

A tool that government uses to achieve government policies

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3
Q

What is a policy indicator?

A

Statistical data used to measure the performance of government policies and gives information on policy performance

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4
Q

What is short-run economic growth?

A

It is the growth of real output resulting from using idle resources, including labour, thereby taking up the slack in the economy

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5
Q

What is long-run economic growth?

A

It is an increase in the economy’s potential level of real output, and an outward’s shift of the economy’s production possibility frontier

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6
Q

What is a gross domestic product (GDP)?

A

the sum of all goods and services produced in the economy over a period of time

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7
Q

What is real GDP?

A

A measure of goods and services produced in an economy removing price changes and inflation

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8
Q

What is nominal GDP?

A

GDP measured at the current market prices, without removing the effects of inflation

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9
Q

What is the definition of being unemployed?

A

Being willing and able to work but are unable to find employment despite an active search

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10
Q

What is the definition of full employment?

A

When there is less than 3% of the work force unemployed

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11
Q

What is inflation?

A

the continuing rise in the average price level

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12
Q

What is deflation?

A

a continuing fall in the average price level

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13
Q

What is disinflation?

A

when the rate of inflation is falling but still in the positive

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14
Q

What is the price index?

A

An index number showing the extent to which a price has changed over a month, quarter or year in comparison to the base year

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15
Q

What is the consumer price index (CPI)?

A

The official measure used to calculate the rate of consumer price inflation in the UK

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16
Q

What is the retail price index (RPI)?

A

The old measure used to calculate the rate of consumer price inflation in the UK

17
Q

What is the balance of payments?

A

A record of all the currency flows into and out of a country in a particular time period

18
Q

What is the current account of the balance of payments?

A

It measures all of the currency flows into and out of a country in a particular time period in payment for imports and exports together with income and transfer flows

19
Q

What are exports?

A

Domestically produced goods or services sold to residents of other countries

20
Q

What are imports?

A

goods or services produced in other countries and sold to residents of this country

21
Q

What is the balance of trade?

A

The difference between the money value of a countries imports and exports.

22
Q

What is a balance of trade deficit?

A

the money value of a county’s imports exceeds the money value of its exports

23
Q

What is a balance of trade surplus?

A

the money value of a country’s exports exceeds the money value of its imports

24
Q

What is a balanced budget?

A

when government spending equals government revenue

25
Q

What is budget deficit?

A

When government spending is greater that the government revenue

26
Q

When does a policy conflict occur?

A

When two policy objectives cannot be achieved at the same time.

27
Q

What is the monetary policy?

A

The governments use of the Bank of England, interest rates and other monetary instruments to achieve policy objectives

28
Q

What is a fiscal policy?

A

The governments use of government spending and taxation to achieve government objectives

29
Q

What is the CPI calculation?

A

total price x weight / total weights

30
Q

What is the inflation rate calculation?

A

CPI2 -CPI1 / CPI1

31
Q

What is productivity?

A

A measure of all factors of productions

Macro 1 (4 decks)

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