MACRO AS - CHAPTER 6

Question 1

MACROECONOMICS

Answer 1

INVOLVES STUDY OF WHOLE ECONOMY AT THE AGGREGATE DEMAND LEVEL

Question 2

POLICY OBJECTIVE

Answer 2

GOAL THAT POLCIY HOLDERS AIM TO MEET/HIT

Question 3

SR ECONOMIC GROWTH

Answer 3

GROWTH OF REAL OUTPUT RESULTING IN UNEMPLOYED RESOURCES GET USED UP

Question 4

LR ECONOMIC GROWTH

Answer 4

INCREASE IN ECONOMY’S PRODUCTIVE POTENTIAL LEVEL OF OUTPUT, OUTWARD SHIFT

Question 5

GDP

Answer 5

SUM OF ALL GOODS AND SERVICES PRODUCED IN AN ECONOMY OVER A PERIOD OF TIME

Question 6

REAL GDP

Answer 6

MEASURE OF GOODS AND SERVICES ADJUSTED FOR INFLATION

Question 7

NOMINAL GDP

Answer 7

GDP MEASURED AT THE CURRENT MARKET PRICES WITHOUT REMOVING THE EFFECT OF INFLATION

Question 8

HOW IS THE GROWTH RATE MEASURED?

Answer 8

THE CHANGE IN NOMINAL GDP

Question 9

WHAT WAS THE GDP DATA FOR 2014?

Answer 9

NOMINAL GDP ROSE BY 3.4%. REAL GDP 1.8%

Question 10

RECESSION

Answer 10

FALL IN REAL GDP (NEGATIVE GROWTH) FOR 2 CONSECUTIVE QUARTERS (6MONTHS)

Question 11

WHEN WAS THE GREAT DEPRESSION? IN US HOW MUCH DID UNEMPLOYMENT RISE AND REAL GDP FALL

Answer 11

1929-30. UNEMPLOYMENT ROSE FROM 3.2% TO 15.9% AND REAL GDP FELL BY 9.4%. 13 MILLION LOST JOBS

Question 12

FULL EMPLOYMENT - BEVERIDGE’S

Answer 12

MEANS LESS THAN 3% OF THE LABOUR FORCE

Question 13

FULL EMPLOYMENT - FREE MARKET

FAVOURED

Answer 13

LEVEL OF U/E AT MARKET CLEARING REAL WAGE RATE LEVEL (NUMBER OF WORKERS WISHED TO HIRE EQUALS THE NUMBER OF WORKERS WANTING TO WORK)

Question 14

WHAT ARE THE TWO METHODS IN MEASURING U/E

Answer 14

CLAIMANT ACCOUNT AND LABOUR FORCE SURVEY

Question 15

CLAIMANT ACCOUNT

Answer 15

METHOD BY WHICH AMOUNT OF JOB SEEKERS ALLOWANCE IS COLLECTED

Question 16

LABOUR FORCE SURVEY

Answer 16

QUARTELY SAMPLE SURVEY OF UK HOUSEHOLDS. PROVIDES INFORMATION TO UK LABOUR MARKET. 1-4 WEEKS PERIOD

Question 17

INFLATION

Answer 17

SUSTAINED RISE IN AVERAGE PRICE LEVELS

Question 18

DEFLATION

Answer 18

SUSTAINED DROP IN AVERAGE PRICE LEVELS

Question 19

DISINFLATION

Answer 19

RATE OF INFLATION IS FALLING BUT IS STILL AT A POSITIVE RATE

Question 20

PRICE INDEX

Answer 20

INDEX SHOWING THE RANGE PRICE OF A GOOD HAS CHANGED OVER A PERIOD. IS COMPARED TO BASE YEAR

Question 21

CPI

Answer 21

OFFICIAL MEASURE OF INFLATION. CALCULATES THE AVERAGE PRICE INCREASES OF A BASKET OF OVER 700 GOODS AND SERVICES

Question 22

RPI

Answer 22

OLDER MEASURE. GOV USES IT FOR STATE PENSIONS, BENEFITS AND SETTING MONETARY POLICY AND SOME TAXES ON GOODS.

Question 23

INDEXATION

Answer 23

AUTOMATIC ADJUSTMENTS OF ITEMS SUCH AS PENSIONS AND BENEFITS THROUGH CHANGES IN THE PRICE INDEX

Question 24

BALANCE OF PAYMENTS

Answer 24

RECORD OF ALL CURRENCY FLOWS INTO AND OUT OF AN ECONOMY IN A PARTICULAR TIME PERIOD

Question 25

CURRENT ACCOUNT

Answer 25

EXPORT AND IMPORTS FLOWS IN A GIVEN TIME PERIOD

Question 26

EXPORTS

Answer 26

GOODS OR SERVICES WHICH ARE SOLD TO OTHER COUNTRIES

Question 27

IMPORTS

Answer 27

GOODS OR SERVICES WHICH ARE BROUGHT IN FROM ANOTHER COUNTRY

Question 28

BALANCE OF TRADE

Answer 28

LARGEST COMPONENT OF BALANCE OF PAYMENTS. IS THE DIFFERENCE BETWEEN IMPORTS AND EXPORTS

Question 29

BALANCE OF TRADE DEFICIT

Answer 29

THE MONEY VALUE OF A COUNTRY’S IMPORTS EXCEED THE VALUE OF EXPORTS

Question 30

BALANCE OF TRADE SURPLUS

Answer 30

THE MONEY VALUE OF A COUNTY’S EXPORTS EXCEED THE VALUE OF IMPORTS