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Economic Definitions > Macroeconomics > Flashcards

Macroeconomics Flashcards

1
Q

National income

A

Income obtained by a country’s residents, regardless of where they are

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2
Q

National outpu

A

sum total of all goods and services added together over a period of time

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3
Q

National expenditure

A

aggregate of all spending in an economy over a year

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4
Q

GDP

A

total market value of all goods and services produced in a country over a given period of time

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5
Q

GNP

A

sum total of all final goods and services produced in a country over a given period of time

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6
Q

NNP

A

GNP adjusted for depreciation

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7
Q

Depreciation

A

Wearing out of capital goods

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8
Q

Factor prices

A

cost of all factors of production used in the production process before the adjustment for taxes and subsidies

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9
Q

Real national income

A

adjusted for inflation

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10
Q

Per capita

A

per head

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11
Q

Absolute poverty

A

income falls below that required for minimum consumption

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12
Q

Relative poverty

A

situation where individuals do not have access to the same living standards as enjoyed by the average person

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13
Q

Aggregate demand

A

sum total of all goods and services produced in an economy over a given period

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14
Q

Price level

A

average of all prices

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15
Q

Aggregate supply

A

total supply of goods and services of the economy

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16
Q

Short run

A

prices of final goods and services can change but factor prices do not

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17
Q

Long run

A

factor prices do adjust to final price changes in macro economy

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18
Q

Natural rate of employment

A

no cyclical unemployment

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19
Q

Short run aggregate supply

A

the period of time before factor prices adjust to a change in prices

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20
Q

long run aggregate supply

A

relationship between real output and the price level at full employment

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21
Q

business cycle

A

periodic fluctuations of national output around its long term trend

22
Q

Demand side policies

A

government policy that attempts to alter the level of AD to complement government policy

23
Q

Fiscal policy

A

policy regards the size and composition of government spending and revenue to influence the economic activity

24
Q

Expansionary fiscal policy

A

increases government expenditure, leads to increased AD

25
Q

Contractionary fiscal policy

A

cutting government spending and/or raising taxes

26
Q

Budget Surplus

A

excess of central government tax receipts over its spending

27
Q

Budget deficit

A

the excess of central government spending over its receipts

28
Q

Automatic fiscal stabilizers

A

progressive tax system that automatically increase the rate of taxation as income rises and thus slows down the potential rise in AD

29
Q

Discretionary fiscal policy

A

deliberate changes in tax rates and government spending to influence levels of AD

30
Q

Monetary policy

A

Central banks control the rate of interest and exchange rate to influence AD

31
Q

Supply side policies

A

improve supply-side potential of an economy

32
Q

Crowding out

A

a situation where the government spending displaces private spendings

33
Q

Full employment

A

a situation where everyone in the labour force is employed

34
Q

underemployment

A

Those employed who are not working at their full potential or part time workers wanting to be full time workers

35
Q

Unemployment

A

those of working age, actively looking for work but cannot find work

36
Q

Unemployment rate

A

the number of unemployed expressed as a percentage of the labour force

37
Q

Cyclical unemployment

A

unemployment caused by business cycle where the slowdown of economic activity with falling aggregate demand is the cause of unemployment

38
Q

Frictional unemployment

A

a result of people inbetween jobs

39
Q

Structural unemployment

A

change in the demand for skills. Mismatch between qualifications and skills

40
Q

Seasonal unemployment

A

associated with jobs that have different demands at different times of the year

41
Q

Real-wage unemployment

A

disequilibrium associated with industries or regions where the demand for labour is lower at certain times of the year

42
Q

Inflation

A

the sustained upward movement in the average level of prices

43
Q

Deflation

A

sustained reduction in the general level of prices

44
Q

Price stability

A

when average level of prices does not move

45
Q

Consumer price index

A

measures the change in purchasing a fixed basket of goods and services from one time period to another

46
Q

Demand pull inflation

A

Inflation induced by a persistence of excess AD over AS

47
Q

Cost push inflation

A

Situation in an economy where there is sustained prices rises because of production costs increasing

48
Q

Phillips curve

A

strong inverse relationship between wage inflation and unemployment

49
Q

Progressive

A

system of tax where the percentage paid in tax increase as income increases

50
Q

Regressive

A

tax regime where the percentage of tax paid is lower

Economic Definitions (6 decks)

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