Macroeconomics Definitions Unit 1 Flashcards
1
Q
Circular Flow of Income
A
The flow of goods/services and income between producer/firms and households/consumers.
2
Q
Closed economy
A
An economy which is operated without imports or exports.
3
Q
Disequilibrium
A
A situation of imbalance.
4
Q
Injection
A
Spending domestic output from outside the circular flow of income, i.e government spending, investment and exports.
5
Q
Income Distribution
A
The extent to which different groups of households share in the total income of the economy.
6
Q
Economic Growth
A
The growth in the value of output of an economy.
7
Q
Macroeconomic Equilibrium
A
A situation where aggregate demand meets aggregate supply, so there are no forces to change the price level and output.
8
Q
Inflation
A
A steady and continuous rise in the average price levels.
