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Economics Definitions > Macro Definitions > Flashcards

Macro Definitions Flashcards

1
Q

Economic growth

A

Growth in GDP over time

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2
Q

Gross Domestic Product

A

Total value added of G/S produced in the country in a year

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3
Q

GDP per capita

A

GDP divided by the population

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4
Q

Boom

A

Period of high economic activity and high levels of employment

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5
Q

Recession

A

Period when country’s GDP falls for 2+ consecutive quarters

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6
Q

Labour force, workforce

A

The number of people who work in a country

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7
Q

Employment

A

Use of labour in the economy to produce G/S

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8
Q

Unemployment

A

When workers ABLE AND WILLING to work at the current wage rates are unable to find employment

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9
Q

Claimant Count

A

Method of measuring unemployment:
- Number of people who are claiming unemployment-related benefits

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10
Q

Level of unemployment

A

Number of people in working population who are unemployed

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11
Q

Rate of unemployment

A

% of country’s workforce that is unemployed

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12
Q

Frictional unemployment

A

Unemployment caused by TIME LAGS when workers move between jobs :)

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13
Q

Seasonal unemployment

A

Unemployment caused by a FALL IN DEMAND during season :(

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14
Q

Structural unemployment

A

Unemployment caused by PERMANENT DECLINE of industry

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15
Q

Cyclical unemployment

A

Unemployment caused by a LACK OF DEMAND in economy (recession)

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16
Q

Income distribution

A

How incomes are shared out between individuals and households

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17
Q

Income

A

Reward for the service provided by labour

Flow of money over time

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18
Q

Wealth

A

Market value of ALL ASSETS owned by a person, group or country at a specific point in time.

Stock of assets

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19
Q

Gross Income

A

Income received before taxes/benefits given

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20
Q

Net Income

A

Income after effect of direct taxes/benefits (DISPOSABLE INCOME)

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21
Q

Distribution of wealth

A

How wealth is shared out between individuals and households

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22
Q

Cost of Living

A

Price level of G/S bought (by average family)

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23
Q

Inflation

A

Sustained rise in the general price level over time

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24
Q

Price stability

A

When general level of prices stays constant over time OR grows at low rate (2% ±1)

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25
Q

Rate of Inflation

A

% Rise in general price level over time

26
Q

Consumer Price Index (CPI)

A

Method used to calculate rate of inflation, using basket of G/S

27
Q

Government Spending

A

Total amount of money spent by a gov. in a given period of time.

28
Q

Direct tax

A

Tax on income/wealth

29
Q

Indirect tax

A

Tax on spending (G/S)

30
Q

Government revenue

A

Source of finance for gov. spending

31
Q

Balanced government budget

A

Tax Revenue = Gov. spending

32
Q

Budget deficit

A

Government spending > Tax Revenue

33
Q

Budget surplus

A

Tax Revenue > Government spending

34
Q

Fiscal policy

A

Policy that uses gov. spending + taxation to affect the whole economy

35
Q

Income & Wealth Redistribution

A

Gov. action, using TAXATION AND BENEFITS, to reduce inequalities of income/wealth.

36
Q

Progressive tax

A

GREATER % of tax as income increases

37
Q

Exports

A

G/S sold abroad

38
Q

Imports

A

G/S bought from abroad

39
Q

International trade

A

Exchange of G/S between countries

40
Q

European Union

A

Economic + political group of countries in Europe that have FREE TRADE with each other

41
Q

Free trade agreement

A

Free movement of G/S between countries, with NO RESTRICTIONS

42
Q

Balance of payments

A

Record of all financial transactions between one country and rest of world.

43
Q

Current account

A

Record of trade in G/S, income flows and transfers between one country and the rest of world.

44
Q

Balance of payments on current account

A

Total of net trade in G/S, income flows and transfers between one country and rest of world.

45
Q

Balanced current account

A

Sum of exports + inflow of income/transfers = sum of imports + outflow of income/transfers

46
Q

Current account deficit

A

Sum of exports + inflow of income/transfers LESS than sum of imports + outflow of income/transfers

47
Q

Current account surplus

A

Sum of exports + inflow of income/transfers GREATER than sum of imports + outflow of income/transfers

48
Q

Monetary policy

A

Policy that controls the total supply of money in the economy to achieve the government’s economic objectives, esp. price stability.

49
Q

Supply-side policy

A

Policy that increases the productive potential, which is the ability of the economy to supply more G/S.

50
Q

Externality

A

Effect of an economic activity on a third party.

51
Q

Negative externality

A

Harmful effect of an economic activity on third parties, also known as an external cost.

52
Q

Positive externality

A

Beneficial effect of an economic activity on third parties, also known as external benefit.

53
Q

State provision

A

G/S directly provided by the government.

54
Q

Legislation

A

Laws to control the way people and organisations behave

55
Q

Regulation

A

rules, directives or government orders to control the way people and organisations behave.

56
Q

Information provision

A

Government provides info to encourage people (esp. consumers) and organisations to change their behaviour.

57
Q

Currency

A

System of money used in a country or group of countries

58
Q

Exchange rate

A

Price of one currency in terms of another currency

59
Q

Globalisation

A

Expansion of world trade in G/S, together with capital flows, leading to greater international interdependence.

60
Q

Development

A

Process of increasing people’s living standard and wellbeing over time

61
Q

Developed country

A

Country with high GDP per capita and developed industry and service sectors

62
Q

Less developed country

A

Country with developing economy that has lower GDP per capita, lower levels of industrialisation and weaker indicators of wellbeing.

Economics Definitions (2 decks)

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