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Economics > Mock Revisiom > Flashcards

Mock Revisiom Flashcards

1
Q

What does supply of labour depend on

A

Number of qualified people
Non wage benefits
Wage condition
Demographic change

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2
Q

Shifts in the demand for labour curve

A 
Rise in consumer demand 
Change in the price of a good 
An increase in productivity 
Subsidy 
Change in cost of capital
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3
Q

What is demand

A

Quantity of goods and services that will be brought at any given time

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4
Q

What are shifts in the demand curve

A

Income
Quality of a good
Advertising
Demand for complement and substitutes

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5
Q

Shifts in the supply curve

A 
Decrease in cost of production
More competition 
Investment 
Technology improvements
Lower taxes 
Government subsidies
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6
Q

PED

A

% change in QD/ %change in price
PED>1 Elastic
PED <1 in elastic

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7
Q

What is income elasticity of demand

A

% change in qd/ % change in income

Normal goods have yed of 0-1
Luxury good have yed of above 1
Inferior goods have negative yed

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8
Q

What is xed

A

Responsiveness of demand to a change in price of another good

%change in demand for good A / % change on supply for good B

Positive xed = substitutes
Negative xed = complements

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9
Q

PES

A

% change in QD/ %change in price

PES >1 elastic
PES < 1 inelastic

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10
Q

What are components of Ad

A

Consumption
Investment
Government spending
Net exports

C + I + G +(X-M)

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11
Q

What causes shifts in ad

A

Changes in expectations changes in components of ad
Changes in monetary policy
Changes in fiscal policy

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12
Q

What causes shifts in short run as

A

Employment costs
Impact of government
Cost of input

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13
Q

Shifts in long run as

A 
Changes unit labour costs 
Change in production costs 
Commodity prices 
Exchange rate 
Government tax and subsidies
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14
Q

What are policies to increase LRAS

A 
Expanding labour supply
Increasing productivity 
Improve mobility of labour 
Increase efficiency 
Innovation 
Expand capital stock
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15
Q

What is quantity theory of money

A 
MV=PT
Money supply
Velocity of circulation 
Price level 
Number of transactions
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16
Q

What are supply side policies

A 
Privatisation 
Deregulation
Reduce income tax
Reduce corporation tax 
Reduce power of trade unions 
Encourage immigration
Reduce unemployment benefit
17
Q

What is monetary policy

A

Rate of interest and the Amount of money circulating the economy

18
Q

What does the rate of interest effect

A 
Consumer durables brought on credit
Housing market 
Mortgage repayments 
Exchange rate
Saving 
Investment
19
Q

What are the limitations to monetary policy

A

Productive growth depends on technological innovation
Can be counter productive
Can’t tackle lack of AD
time lag

20
Q

What is NAIRU

A

Non accelerating inflation rate of unemployment

Same as voluntary unemployment

21
Q

What are the difficulties Using GDP to measure living standards

A 
GDP is an average 
Does not take into account literacy rates
National figure 
Does not represent quality of life
Does not factor inflation
22
Q

What is the difference between GDP and gni

A

GDP is measure of total output of uk economy

GNI is value of goods and services produced by a country over time plus net overseas interest payments and dividends

23
Q

What are the advantages to free trade

A 
Increase economic growth 
Lower government spending 
Specialisation 
Maximise economies of scale 
Choice 
Innovation
24
Q

What are the disadvantages to free trade

A 
Reduce tax revenue 
Poor working conditions 
Over dependency on foreign goods
Risk - countries can cut supply 
Loss of sovereignty
25
Q

What is protectionism

A

Attempt to impose restrictions on trade in goods and services

26
Q

Advantages of protectionism

A 
Increase domestic demand 
Encourage efficiency 
Helps new industry 
In short term can reduce current account deficit 
Protect domestic jobs 
Protect non renewable resources
27
Q

Disadvantages of protectionism

A

Less choice
Decrease consumer surplus
Increase price
In short term reduce wages

Economics (14 decks)

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