Macro definitions Flashcards
what is net national product?
(difference between GDP and GNP) the value of output produced by productive factors owned by the residents of the country, irrespective of whether they are located within the country or abroad, over one year, and after adjustment for depreciation
what is purchasing power parity?
an exchange rate derived from relative price levels, such that the prices of similar G&S in different countries are the same when measured in the same currency
what is standard of living?
the bundle of G&S available for the typical citizen in one year
what is GNP?
includes: - an index for life expectancy - an index for school enrolment and adult literacy - an index for GDP per capita (in PPP) -
what is measurable economic welfare?
an alternative to crude GDP. It includes:
- GDP&NNP
- adds allowance for leisure, non-marketed G&S like households, underground activities
what is economic growth?
an increase in the real output of an economy
what is actual growth?
the increase in real output that has already been experienced by an economy
what it potential growth?
the increase in an economy’s productive capacity
what is productivity?
the amount of output that can be produced from a unit of given input
what is entrepreneurship?
the development of new business opportunities and the bearing of business risk
what is unemployment?
where there are people actively seeking work but are unable to find work or unwilling to accept work available
what is the labour force?
all people within a country who are economically active (either working or seeking work)
what is demand deficient unemployment/ cyclical unemployment?
when AD is insufficient to generate enough production to employ the entire labour force
what are demand-side policies?
policy measures used by the government to effect desired changes in AD in the economy
what is fiscal policy?
govt manipulation of its budgets to influence economic activity by controlling AD
