Macro: Economic growth Flashcards
Define an economic indicator
a statistic about how an economy is performing and it’s likely to preform
Define policy objective
Gol or target that the policy makers hope to achieve
What are the 4 main microeconomic objectives?
- Economic growth
- Low inflation
- Low unemployment
- Satisfactory balance of payments
What is a trade-off?
Achieving or doing one thing at the detriment of another
What is total GDP?
-Market value of all final goods and services produced in a specific time period often annually
-Total values represent the aggregate sum of a variable for a given population or area.
What does a rise in GDP mean?
That there is economic growth
What does a rise in economic growth mean?
The rate of economic growth has increased
Define recession.
Two consecutive quarters of negative economic growth.
Define short-term economic growth
Growth of real output resulting from the use of idle (unused) resources including labour thereby taking up the slack in the economy
Define long-term economic growth
An expansion of the economy’s productive potential
Define Capital goods
Goods that are used in producing other goods, rather than being bought by consumers e.g. machinery for producing a teddy
Define Consumer goods
Goods bought and used by consumers, rather than by manufacturers for producing other goods e.g. a toy
Define economic growth
-Increase in a country’s real GDP over time.
-Signifies an expansion of an economy’s production capacity and is a key indicator of its overall economic health.
How can we measure economic growth?
-Percentage change in real GDP over a specific period, such as a year.
What is the formula for growth rate?
Growth Rate = [(GDP at Time 2 - GDP at Time 1) / GDP at Time 1] × 100.
