Macro definitions Flashcards
availability of credit
funds available for firms and households to borrow
illegal informal market
economic activities that fall below the governments radar
claimant account
a method of measuring unemployment by counting all those who claim the jobseekers allowance and other unemployment related benefits
consumer prices index (CPI)
official measures used to calculate the rate of consumer price inflation, using a basket if common goods
economic shock
unexpected events and their effects on economies; may demand side or supply side
exchange rate
the price of a currency measured in terms of another currency
exports
domestically produced goods and services sold to residents of other countries
full employment
all those willing and able to work are able to find jobs
gross national income (GNI)
sum of value added by all producer who reside in a nation, plus product taxes not included in the value of output, plus receipts of primary income from abroad.
gross national product (GNP)
market value of all products produced per annum by the labour and property supplied by the citizens of one country
imports
non domestically produced goods and services sold to residents of this country
index numbers
numbers allowing accurate comparisons over time to be made. the base year value is typically 100.
inflation target rate
the CPI inflation target rate set by the government, which the Bank of England attempts to achieve; currently 2%
job seekers allowance (JSA)
unemployment related benefit
labour force survey
a quarterly survey of UK households, recording information on the personal employment circumstances of the respondents
liquidity
the ease with which an asset can be turned into cash without loss or delay
macroeconomics
involves the study of the whole economy at the aggregate level
macroeconomic stability
occurs when there is low volatility of key macroeconomic indicators
marginal propensity to consume (MPC)
the proportion of an increase in disposable income that is spent on consumer goods
national wealth
the stock of all goods with the value in an economy
per capita
per person/ per head
performance indicator
provides information used to judge success or failure of a government policy
policy objectives
target or goal policy-makers aim to hit
price index
an index number showing the extent to which a set of prices has changed in comparison to the prices in the base year
purchasing power parity (PPP)
adjustments of exchange rates to reflect the actual purchasing power of a currency
retail prices index (RPI)
an older measure used to calculate the rate of consumer price inflation
wealth
stock of assets
GDP
The total value of goods and services produced within an economy in a given time.
Economic growth
when real GDP is rising (output is increasing) so more goods and services are being produced, unemployment is falling, consumer confidence is rising and living standards are rising
trend growth in GDP
the average rate of growth
economic recovery
a period of economic growth following a recession (short run economic growth)
recession
a fall in GDP over two consecutive quarters
slump
a prolonged period of recession
economic boom
when an increase in GDP is above trend growth GDP
