Macro-economics

Question 1

GDP at factor costs

Answer 1

Deducts indirect taxes from the value of output and adds back in subsidies

Question 2

Economic activity can be measured in three ways

Answer 2

1. Value of expenditure by firms on inputs
2. Value of purchases by consumers
3. Value of output by firms

Question 3

What is national income or net national product

Answer 3

GNP at factor costs less capital depreciation

Question 4

What’s is the short term Phillips curve

Answer 4

The inverse relationship between unemployment and inflation

Question 5

What can these banks all do - The Bank of England, the ECB, the central bank of Japan and the Central bank of USA

Answer 5

Set interest rates

Question 6

Roles of the US federal reserve

Answer 6

Can set interest rates
Not responsible for managing government debt
Not responsible for deposit protection insurance

Question 7

What elasticity is the very short run aggregate supply

Answer 7

Perfectly elastic

Question 8

Lagging indicators

Answer 8

Unemployment levels

Question 9

Narrow money

Answer 9

Notes and coins in circulation plus highly liquid deposits

Question 10

Money multiplier

Answer 10

= 1 / reserve requirement

Question 11

Frictional unemployment

Answer 11

Individuals in between jobs

Question 12

Structural

Answer 12

Changes in demand

Question 13

What is Basel III

Answer 13

Sets out capital and liquidity rules for banks