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Economic A Level > Macro Economic Definitions > Flashcards

Macro Economic Definitions Flashcards

1
Q

Macro economic equilibrium

A

A situation where AD = AS and GDP is constant. Or where injections = withdrawals in the circular flow, leaving GDP unchanged

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2
Q

Economic stability

A

A situation in which the main macro-economic variables are not changing rapidly

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3
Q

Unemployment

A

Occurs when labour is out of work, willing and able to work and actively seeking work

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4
Q

Unemployment rate

A

The percentage of the labour force that is willing and able to work, actively seeking work but not currently in work

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5
Q

Labour force survey

A

The internationally recognised method of calculating the unemployment rate, measured by sampling the number of workers who are unemployed

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6
Q

Claimant count

A

The narrow measure of calculating the unemployment total that includes only those who are out of work, willing and able to work, actively seeking work and in rece of unemployment benefits

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7
Q

Inflation

A

A sustained rise in the price level over time as measured by changes in the consumer price index

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8
Q

Inflation rate

A

The percentage increase in the price level measured over the course of 1 year when prices are rising on a sustained basis

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9
Q

Injections

A

Any money that adds to consumer spending in the circular flow in the form of investment, government spending and exports

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10
Q

Leakages

A

Any money that is withdraw from the circular flow in the form of tax, saving or imports

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11
Q

Consumer spending

A

Spending by households or individuals on goods and services in order to get utility

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12
Q

Investment

A

Spending by firms on capital in the form of plants, equipment or machinery

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13
Q

Government Spending

A

Any injection of funds into the circular flow by the public sector

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14
Q

Net exports

A

The difference between the value of exports and imports

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15
Q

AD

A

Total expenditure on goods and services at any given price level

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16
Q

AS

A

The total output of all goods and services at any given price level

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17
Q

GDP

A

The total value of output produced by an economy in a year

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18
Q

GDP per capita

A

The total value of output produced by an economy in 1 year divided by the population

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19
Q

Exports

A

Any goods or services sold to other nations that results in an inflow of income into the circular flow

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20
Q

Imports

A

Any purchase of foreign goods or services that leads to an outflow of money from the domestic economy

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21
Q

Balance of payments/ Balance of Trade/ Current account balance

A

The record of the inflows and outflows of currency that results from the international trading of exports and imports

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22
Q

Current account surplus

A

When there is a net inflow of earnings resulting from international trade

23
Q

Current account deficit

A

When there is a net outflow of money resulting from international trade

24
Q

Protectionism

A

Any attempt to restrict the free trade of goods an d services across international borders

25
Q

Free trade

A

The unrestricted movement of goods and services across international borders due to an absence of any protectionism

26
Q

Tariffs

A

Taxes placed on foreign imports as they enter the home country that are designed to raise their market price

27
Q

Export subsidies

A

Grants given to UK firms by the government designed to lower the cost and the price of the ggods/services sold abroad

28
Q

Quota

A

A physical limit on the quantity of imports allowed into a country in a given period of time

29
Q

Economic growth

A

An increase in the value of GDP over 1 year

30
Q

Economic growth rate

A

The percentage increase in the value of GDP over time

31
Q

Recession

A

When there are 2 consecutive quarters of falling GDP

32
Q

Budget surplus

A

When the government collect more tax revenue than it spends enabling it to repay part of the national debt

33
Q

National debt

A

The running total of all previous budget deficiets that have not yet been repaid

34
Q

Budget Deficit

A

When the government is spending more than it collects in tax revenue therby adding to the national debt

35
Q

Government borrowing

A

The amount of money required by the government when it has a budget deficit, financed by selling bonds

36
Q

Fiscal policy

A

The manipulation of tax rates, government spending and borrowing to achieve macro-economic objectives

37
Q

Monetary policy

A

The manipulation of interest rates, the exchange rate or the money supply in order to achieve macro-economic objectives

38
Q

Supply side policies

A

Any policy designed to increase the productive potential of an economy often by boosting AD

39
Q

Contractionary policy

A

Any measure designed to reduce the level of economic activity in an economy by reducing AD

40
Q

Expansionary policy

A

Any measure Designed to increase the level of economic activity in an economy often by boosting AD

41
Q

Deflation

A

A fall in the price level over time

42
Q

Dis-inflation

A

A fall in the rate of increase of prices

43
Q

Rate of interest

A

The cost of borrowing money or reward for saving

44
Q

Exchange rate

A

The price of 1 currency expressed in terms of another

45
Q

Currency appreciation

A

A rise in the value of 1 currency against another

46
Q

Currency depreciation

A

A fall in the value of 1 currency against another

47
Q

De regulation

A

A supply side policy that abolishes rules or laws that force firms to behave in a particular way

48
Q

Corporation tax

A

A direct tax levied on a firms profits by the government

49
Q

Real income

A

Income that has been adjusted for inflation

50
Q

Disposable income

A

The remaining income of a person after tax

51
Q

Wealth

A

A measure of stock accumulated assets owned by an individual

52
Q

Saving

A

The part of disposable income that is not spent

53
Q

Price level

A

The average of current prices across all goods and services produced in an economy

Economic A Level (22 decks)

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