Macroeconomics In Business Flashcards
Protectionism
It’s an economic policy of restraining imports from other countries through methods such as tariffs
Tariffs
Tax imposed by one country on the good and services imported from another country
Quotas
A limited quantity of a particular product which under official controls can be produced, exported or imported
Voluntary export limit
A self-imposed trade restriction on the quantity of goods a country can export to other countries
Free international trade
A pact between two or more nations to reduce import and export barriers among them
Macroeconomics Objectives
Government set targets for the whole economy
Economic growth
Annual percentage change in GDP measured by changes on real GDP
Inflation
Rate a currency devaluation and consequently general level of prices for good and services rises
Recession or Downturn
Falling demand and high interest take effect. Real GDP growth slows or falls. Incomes and consumer demand falls and profits are reduced
Business investment
Allocating resources to expand and generate future financial returns
Boom
Period of rapid economic growth with rising income and profit. inflation increases. Business confidence eventually falls.Interest rates increase to reduce inflation.
Slump
A prolonged recession leads to a slump where real GDP. Products and assets price falls. The government might have failed to take corrective economic actions.
Recovery and growth
Real GDP starts to increase again. Corrective economic actions starts to take effect. Lower product prices increases competitiveness of experts and increases demand
Monetary policy
Concerned with interest determined by the base interest rate of central bank
Fiscal Policy
Concerned with government spending and tax rates
Supply-side policy
Aim to increase industrial competitiveness
