Macroecons

Question 1

Economic growth definition

Answer 1

increase in RNY/ouput of an economy over a specific time period (usually a year)

Question 2

Economic growth measurement

Answer 2

% change of an economy’s real GDP

Question 3

Sustained economic growth

Answer 3

Econ growth sustained over an extended period of time without inflationary measures (both AG PG happens)

Question 4

Sustainable economic growth

Answer 4

Rate of econ growth that can be maintained without causing any significant economic problems for future generations

Question 5

Inclusive econ growth

Answer 5

econ growth is sustained and broad based across economic sectors and creates productive employment opportunities for the majority of the country’s population

(for SG: equitable distribution of Y)

Question 6

GDP

Answer 6

Total mkt value of all g+s newly produced within the geographical boundaries of an economy in a given period of time

Question 7

Real GDP eqn

Answer 7

nominal GDP/GDP deflator x100

Question 8

Change in real GDP eqn

Answer 8

% change nominal GDP - % inflation rate

Question 9

GDP per capita eqn

Answer 9

Real GDP/pop size

Question 10

Gross national income GNI

Answer 10

Real GNI= Real GDP+net factor from abroad (basically Factor Y from overseas-fact Y to overseas(non residents))

Question 11

Real GDP growth rate

Answer 11

Real GDP(this year)- Real GDP(last year)/Real GDP(last year) x100

Question 12

Material SOL

Answer 12

Quality and quantity of goods and services available for consumption by residents in a country

Question 13

NMSOL

Answer 13

intangible aspects that enable residents in a country to enjoy a fulfilling life

Question 14

GINI coeff

Answer 14

close to 1 is very inequal

Question 15

Uemployment

Answer 15

situation where people are unable to find employment even though they are of legal working age and are both capable and willing to work at current wage rates

Question 16

*3 types of UN

Answer 16

DD-def: DD decrease, decline business revenue, lay off workers to maintain profit margins
Structural: mismatch of skills, cannot immediately take up jobs
Frictional: result of mkt imperfections, jobless while looking for a new one after quitting

Question 17

UNEM rate eqn

Answer 17

no of unem/labour force x 100

Question 18

Price stability definition

Answer 18

GPL of g+s in an economy, low and stable inflation

Question 19

Price stability measurement

Answer 19

Consumer price index CPI

Question 20

CPI eqn

Answer 20

Inflation rate= CPI this year-CPI last year/ CPI last year x100

Question 21

Balance of trade definition

Answer 21

Trade of all g+s between residents on of a country and the rest of the world

Question 22

BOT eqn

Answer 22

X-M

Question 23

Balance of payments

Answer 23

statement of receipts for all econ transactions between residents of a country and the rest of the world over a period of time (usually a year)

Question 24

BOP inflow

Answer 24

Credit items

Question 25

BOP outflows

Answer 25

debit items

Question 26

AD aggregate DD

Answer 26

total level of spending in an economy at each GPL. Shows the amt of domestically produced g+s which households firms governments and foreigners are wiling to buy at each GPL

Question 27

C expenditure

Answer 27

disposable Y households spend on consumer g+s to satisfy current wants

Question 28

I expenditure

Answer 28

expenditure on new captital assets

Question 29

G expenditure

Answer 29

Spending by gov on g+s for current consumption or expanding the productive capacity of its econom

Question 30

AS aggregate SS

Answer 30

shows total domestic output of g+s that firms collectively are willing to produce at each GPL

Question 31

Multiplier effect

Answer 31

Is a numerical coeff for which a change in autonomous spending C I G (X-M) is multiplied to show the final change in eqm level of Real national output

Question 32

k eqn

Answer 32

k=1/MPS+MPT+MPM=1/MPWithdrawals=1/MPC

Question 33

Injections J

Answer 33

Y received by om firms that do not arise from dom household consumption

Question 34

Withdrawals W

Answer 34

circular flow refer to household income that is not spent on domestic G+S

Question 35

Actual growth

Answer 35

annual % increase in RN ouutput produced

Question 36

Potential growth

Answer 36

annual % increase in capacity of economy to produce

Question 37

Recession

Answer 37

Economy suffers from fall in RNY for at least 2 consecutive quarters

Question 38

Inflation

Answer 38

sustained rise in GPL of a given basket of goods and services in an econ over time (usually a year)

Question 39

CPI

Answer 39

weighted ave of the price of a basket of g+s purchased by the average household in a specific time period (usually a year)

Question 40

Deflation

Answer 40

Sustained decrease in the GPL of the economy

Question 41

fiscal policy

Answer 41

DD management policy that works via Gov expenditure G and Taxation T to influence AD and eventually RNY/output/employment/GPL

Question 42

Progressive tax

Answer 42

higher Y group taxed a higher proportion of Y than the lower Y group

Question 43

Regressive tax

Answer 43

Lower income group is taxed a higher prop of Y than high Y groups

Question 44

Indirect tax

Answer 44

tax on expenditure of g+s

Question 45

direct tax

Answer 45

based on Y and wealth

Question 46

Monetary policy

Answer 46

DD management policy that works using IR and ER to influence AD and eventually RNY/ouput/employment/GPL

Question 47

Appreciation of currency

Answer 47

Ext value increases relative to foreign currency, same unit of dom currency can be exchanged for more units of foreign currency

Question 48

Depreciation of currency

Answer 48

Economic growth