Macroeconomic Trends

Question 1

Real Wage Rate

Answer 1

Is the quantity of goods and services that an hour of labour earns. Calculated as Money Wage Rate/Price Level

Question 2

Law of Diminishing Returns

Answer 2

Decrease in marginal output. (More is less and less addition)

Question 3

Money

Answer 3

Any commodity or token that is generally acceptable as a means of payment

Question 4

Means of Payment

Answer 4

A method of settling a debt

Question 5

Functions of Money

Answer 5

Medium of exchange,
Unit of account,
Store of value

Question 6

Medium of Exchange

Answer 6

Any object that is generally accepted in exchange for goods and services

Question 7

Barter

Answer 7

when goods and services are traded for goods and services with no medium of exchange

Question 8

Unit of account

Answer 8

Is an agreed measure for stating the prices of goods and services.

Question 9

Store of value

Answer 9

something that can be held and exchanged later for goods and services

Question 10

Currency

Answer 10

Notes and coins held by business and individuals

Question 11

M1

Answer 11

total of currency, chequable deposits of individuals and businesses

Question 12

M2

Answer 12

M1 + non chequable deposits, personal and non personal + fixed term deposits