macroeconomics objectives vocab Flashcards
macroeconomics
the study of the economy as a whole
economic indicator
a quantitative measure of economic performance e.g. unemployment, inflation etc
economic growth
the increase in an economy’s output over time
inflation
a sustained rise in the average price level
unemployment
a situation where people are out of work but are actively seeking work/willing to and be able to work
the balance of payments
a record of all an economy’s financial transactions with the rest of the world
economic stability
the avoidance of volatility in the main macroeconomic indicators such as unemployment rates, growth rates, inflation rates and exchange rates
gdp
the value of the total output produced in an economy over a given time period
trade surplus
exports are greater than imports
trade deficit
imports are greater than exports
unemployment rate
those who are out of work, but are actively seeking work as a percentage of workforce/economically active
population of working age
men and women between 16-64
labour force/work force/economically active
those who are in work or actively seeking work (employed + unemployed)
economically inactive
people of working age who choose not to work or can’t work e.g. people in education/looking after children
labour force participation rate
the percentage of the population of working age who are economically active
long term unemployment
percentage of unemployed who have been out of work for more than a year
gnp
the money evaluation. of income accuracy going to a nations citizens irrespective of the location of the factors of production that generated it. usually measure over one year = gdp + net property income from abroad
inflation rate
the percentage change in the average price level over a period of time - usually one year
purchasing power
the amount of goods and services that can be bought with a given amount of money
deflation
a sustained fall in the average price level
consumer price index CPI
a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services
sustainable economic growth
occurs when the needs of the current generation are met, without compromising the ability of future generations to meet their own needs
sustained economic growth
a continued and steady increase in output - to achieve sustained growth - both potential and actual growth must occur simultaneously
national income
the monetary evaluation of the total output produced in country within a time period, usually a year
national wealth
monetary evaluation of the stock of money and goods that a nations citizens own - at a point in time
potential growth
occurs when there is an increase in the productive capacity of the economy
actual growth
occurs when an economy produces more goods and services
transfer payment
occurs when money changes hands without an economic activity lacking place
output gap
occurs when the output of an economy is below potential output
gdp per capita
gdp/population gdp per head of population
real gdp
the total value of an economy’s output in a time period adjusted to take inflation into account
nominal gdp
the total value of an economy’s output in a time period measured using the prices of that time period
living standards
the quality of life that individuals experience in a country
black economy
unrecorded and illegal economic activity
balance of payments surplus
inflows greater than outflows
balance of payments deficit
outflows greater than inflows
multinational company MNC
a firm that has a base of operations in more than one country
disinflation
the rate at which the average price level is rising has slowed down
positive relationship
occurs when 2 variables move in the same direction
negative relationship
occurs when 2 variables move in opposite directions
consumption expenditure C
expenditure by consumers in goods and services
investment expenditure I
expenditure by firms on new machinery and other capital goods
government expenditure G
expenditure by the government on the provision of goods and services
export expenditure X
expenditure by foreign individuals and organisations on domestic goods and services
import expenditure
expenditure by domestic individuals and organisations on foreign goods and services
net exports X-M
export expenditure minus import expenditure
circular flow of income
an economic model that illustrates the flow of money, goods, services from households is firms in an economy
