Macroeconomics key terms end of Michaelmas Flashcards
same as the first one
Actual output
Level of real output produced in the economy in a particular year.
GDP
Gross domestic product
The sum of all goods and sercices (level of output) produced in the economy in a year
GDP ADJ INFL
Real GDP
A measure of all the goods and services produced in an economy, adjusted for inflation.
No infl
Nominal GDP
Measures the current market prices, without removing the effects of inflation.
Economic cycle
Upswing and downswing in aggregate economic activity taking place over 4-12 years.
Negative output gap
The level of actual real output in the economy is lower than the trend output level.
Positive output gap
the level of actual real output in the ecnomy is greater than the trend output level.
Recession
6+ months of negative economic growth/declining RNO.
Saving
Unspent income.
Inflation
Persistent/ contiual rise in average price level.
Trend growth rate
Annual average percentage increase in the productive capacity of the economy.
Short run economic growth
Growth of real output resulting from using idle resources.
+Outward moving ppf
Long run economic growth.
An increase in the economy’s productive potential level of real output
Investment
Total planned spending by firms on capital goods in the economy.
Consumption
Total planned spending by households on consumer goods and services produced within the economy.
