macro-economics (general) Flashcards

1
Q

who are the key players withtin the economy?

A
  • goverment
  • industry
  • conumers
  • central bank
  • civil society
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2
Q

what is the role of the goverment in the economy?

A
  • sets rules that economic agents must oblige to
  • produces goods and services (schools, hospitals
  • can provide support to business
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3
Q

what are economic agents?

A

someone that engaes in economic activity

goverment, consumers, producers

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4
Q

what are the roles of businesses and consumers

A
  • business: produce goods and services
  • consumers: purchase these
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5
Q

which one is more safe- private sector funding or state funding?

A

private sector funding

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6
Q

what are SMEs?

A

small- medium enterprises (businesses)

50-250 people

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7
Q

which economies are more reliant on consumers?

A

UK and US
so their confidence has a large impact on the economy

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8
Q

what is the role of the central bank in the economy?

A
  • sets intrest rates
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9
Q

How do civil socities impact the economy?

A

they can fight for chnages which will cause changes for businesses ad the goverment

eg: trade unions

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10
Q

what are some methods for financing bunsinesses?

A
  • retained profits
  • borrowing
  • issuing shares
  • issuing bonds
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11
Q

how is retained profit used?

A
  • a proportion used to reawrd shareholders (diviends)
  • funding investment (purchasing capital goods)
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12
Q

what are capital goods?

A

goods used to produce other goods and services

eg: equipment, machinary, tools

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13
Q

why might firms need to borrow?

A
  • funding investment
  • lacking money for day to day operations- wage/ business materials (delays from providing goods and recieving payments)
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14
Q

define a ‘share’

A

a financial asset that gives one part ownership in a company

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15
Q

why are shares attractive to investors?

A
  • capital gains can be made
  • dividends an income stream
  • they provide a means of taking over a company
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16
Q

how are shares traded?

A
  • primary market: shares are first bought - (IPO: Initial Public Offering)
  • secondary market : investors buy/sell shares from each other
17
Q

how do bonds work?

A
  1. company issues bonds
  2. investors will purchase the bond
  3. up until the maturity date - investors will recive regular intrest payments
  4. when the bond matures investors will recieve cash in full
18
Q

what are people who own bonds callled?

A

creditors/ debtholders

19
Q

what are regular intrest payments from a bond called?

A

coupon/ coupon rate

20
Q

whar are some key issues for the goverment and economy?

A
  • economic growth
  • employment
  • inflation
  • trade
21
Q

what does the size of the conomy impact?

A
  • amounts of goods/services availible to citezens (living stndards)
  • quality of countries infrastructure
  • quality of public services
22
Q

what is the measure for the sixe of the economy?

A

Gross Domestic Product (GDP)

23
Q

Why is inflation a problem?

A

errodes living standards

prices for goods increases- wages do not

24
Q

why is trade important?

A

national economies are only capable of producing a limited range of goods and services
* lack of natural resources
* some countries have weak technological capabilities