Module 17 - The macroeconomic environment

Question 1

State the six main macroeconomic objectives

Answer 1

.

Question 2

Give examples of macroeconomic policy instruments

Answer 2

.

Question 3

Explain how financial well-being of the country can be analysed

Answer 3

.

Question 4

Net worth

Answer 4

.

Question 5

Consumption of domestically produced goods and services

Answer 5

.

Question 6

Net savings

Answer 6

.

Question 7

Net taxes

Answer 7

.

Question 8

Transfer payments

Answer 8

.

Question 9

Imports

Answer 9

.

Question 10

Withdrawals

Answer 10

.

Question 11

Investment

Answer 11

.

Question 12

Government expenditure

Answer 12

.

Question 13

Exports

Answer 13

.

Question 14

Injections

Answer 14

.

Question 15

Aggregate demand

Answer 15

.

Question 16

Explain why planned withdrawals need not equal planned injections

Answer 16

.

Question 17

Explain the effect of an increase in injections on the main macroeconomic objectives

Answer 17

.

Question 18

Value added

Answer 18

.

Question 19

Gross domestic product (GDP) at market prices

Answer 19

.

Question 20

Gross value added (GVA) at basic prices

Answer 20

.

Question 21

Gross national income (GNY) at market prices

Answer 21

.

Question 22

Net national income (NNY) at market prices

Answer 22

.

Question 23

Households’ disposable income

Answer 23

.

Question 24

State the two conditions for equilibrium national income

Answer 24

.

Question 25

Explain how equilibrium national income is restored if the economy is not initially at equilibrium

Answer 25

.

Question 26

Explain the effect of a change in injections or withdrawals on the equilibrium level of national income

Answer 26

.

Question 27

Explain why a change in injections has a multiplier effect on national income

Answer 27

.

Question 28

Marginal propensity to consume domestically produced goods and services

Answer 28

.

Question 29

The multiplier

Answer 29

.

Question 30

The principle of cumulative causation

Answer 30

.

Question 31

Actual growth rate

Answer 31

.

Question 32

Potential growth rate

Answer 32

.

Question 33

Potential output

Answer 33

.

Question 34

Full-capacity output

Answer 34

.

Question 35

Output gap

Answer 35

.

Question 36

Human capital

Answer 36

.

Question 37

Knowledge spillovers

Answer 37

.

Question 38

Describe the four phases of the business or trade cycle

Answer 38

.

Question 39

State the main determinants of the actual growth rate

Answer 39

.

Question 40

State the two main determinants of the potential growth rate

Answer 40

.

Question 41

Discuss the main factors that contribute to a country’s growth

Answer 41

.

Question 42

Discuss the policies that a government could introduce to stimulate economic growth

Answer 42

.

Question 43

Unemployed

Answer 43

.

Question 44

Labour force

Answer 44

.

Question 45

Unemployment rate

Answer 45

.

Question 46

Standardised unemployment rate

Answer 46

.

Question 47

Claimant count

Answer 47

.

Question 48

Aggregate demand for labour

Answer 48

.

Question 49

Aggregate supply for labour

Answer 49

.

Question 50

Equilibrium (or natural) level of unemployment

Answer 50

.

Question 51

Disequilibrium unemployment

Answer 51

.

Question 52

Frictional (or search) unemployment

Answer 52

.

Question 53

Structural unemployment

Answer 53

.

Question 54

Technological unemployment

Answer 54

.

Question 55

Regional unemployment

Answer 55

.

Question 56

Seasonal unemployment

Answer 56

.

Question 57

Demand-deficiency (or cyclical) unemployment

Answer 57

.

Question 58

Real-wage unemployment

Answer 58

.

Question 59

Discuss the main costs of unemployment

Answer 59

.

Question 60

Discuss the main causes of unemployment

Answer 60

.

Question 61

Discuss possible policies to reduce unemployment

Answer 61

.

Question 62

Rate of inflation

Answer 62

.

Question 63

GDP deflator

Answer 63

.

Question 64

Menu costs

Answer 64

.

Question 65

Demand-pull inflation

Answer 65

.

Question 66

Cost-push inflation

Answer 66

.

Question 67

Distinguish between nominal figures and real figures

Answer 67

.

Question 68

Explain the shapes of the AD and AS curves

Answer 68

.

Question 69

Discuss the costs and benefits of inflation

Answer 69

.

Question 70

Discuss the problems caused by deflation

Answer 70

.

Question 71

Discuss the causes of inflation

Answer 71

.

Question 72

Discuss the possible policies to reduce inflation

Answer 72

.