Macroeconomics Flashcards
What are the:
6 economic objectives
- stable economic growth
- Low inflation
- low unemployment
- A balance of payments equilibrium and exchange rate stability
- Protecting the environment
- Reduce inequality in our society
What is:
Economic growth
The percentage increase in real GDP in an economy over a period of time. Economic growth is often measured using GDP and expressed as a percentage change in real GDP.
What is:
Gross domestic product
the total value of output of goods and services produced in an economy over a period of time
What is:
Real stats
stats that have been adjusted for inflation
What is the:
Economic cycle
The period of time where economic growth fluctuates. For example: boom, recession, recovery and downturn
What is the:
Boom
The peak of economic cycle where GDP is growing at its fastest
What is:
Downturn
Period in the economic cycle where GDP grows but more slowly
What is:
Recession
Period of temporary economic decline which is generally identified by a fall in GDP for 6 montsh
What is:
Recovery
Period in the economic cycle where GDP starts to rise again. Businesses and consumers regain their confidence and economic activity is on the increase
What is:
Aggregate demand
the total demand in the economy (C + I + G + (X-M))
What is:
Aggregate supply
The total amount of goods and services produced in a country at a given price level in a given period of time
What is:
Overheat
When demand is rising too fast causing prices to rise which leads to a situation where governments try to rectify the problem by raising taxes of raising intrest rates
What is:
Human capital
The level of skill and education of the workforce
What is:
National income
The value of all income in the economy added together which includes income from wages, profits, dividends, intrest and other income earned from abroad
What is:
Seasonal unemployment
When workers are unemployed as when the seasons change the demand goes down
What is:
Frictional unemployment
Transition between different jobs
What is:
Structural unemployment
unemployment caused by change in the economy
What are the different types of:
Unemployment
Structural
Voluntary
Cyclical
Seasonal
Technological
Frictional
Real-wage
What is:
Cyclical unemployment
Unemployment resulting from changes in the economic cylce
SPICEPAWS
Shadow economy
Per Capita
Inequality
Cost of Living
Externalities
Product quality
Accuracy
Wealth
Social costs
(limitations of GDP)
Causes of:
Inflation
Cost push or demand pull
What is;
Real income effect
When deflation leads to an increase in value of money leading to higher consumer spending
What is
Balance of trade effect
when price levels go down exports go up as money is worth more but the import rate goes down because paying will be more expensive
What is:
Intrest rate effect
When inflation decrease the cost of borrowing decreases leading to an increase in consumption and AD
