Macro Economics 1 Flashcards
what is a macro economy
It is all parts of the economy put together
What are the 4 main macro economic objectives
Sustainable economic growth
Low and stable inflation
Low unemployment
Stable balance of payments
What are the extra economic performance objectives
A more equal distribution of income and wealth
Achieving a balanced budget
Improving the environment
What is a recession
2 successive quarters of falling GDP
What is unemployment rate
It is the number of unemployed as a % of the labour force
What is balance of payments
It is a measure of exports compared to the value of imports
Surplus -exports is greater
Deficit - Imports is greater
What is inflation rate
How quickly prices are changing
What is indexing data
It is simplifying data by relating all values to a base value of 100
Divide the value by the bases proper figure and then x100
What is nominal GDP
Measure of the value of output
Data is not adjusted for inflation
What is real GDP
Measure of volume of output
Adjusted for inflation
How do you convert from nominal to real
Nominal GDP/Recent Price index x 100
What is standard of living
Measure of material welfare or well being
Measured using GDP per capita
Why is GDP per capita not useful for welfare
Shadow economy
Value of unpaid work
Why might GDP data give a distorted picture of living standards
Regional variations in income and spending
Inequalities in income and wealth
Leisure and working hours and working conditions
Changes in life expectancy
The value of non-market output
Environmental considerations
Defensive expenditures
What are the 4 stages in an economic cycle
Recession
Recovery
Boom
Slowdown
