paper 2 - topic 3 economic peformance Flashcards
short run economic growth
growth based on increased utilisation of unemployed resources
long run economic growth
growth based on increasing the potential output level of an economy
economically inactive
those of working age who arnt in work and arnt looking for work
trend growth
the rate of growth in the LRAS over time, representing the maximum potential capacity of the UK economy
economic cycle
the economic cycle refuses to the repeated partern of fluctuatinions in the short run economic growth and how it differs from the trend growth of the economy
boom
period of above average short run economic growth
downturn
period here short run economic growth falls from above the average to below the average
recession
two successive quarters of a year where short run economic growth is negative
recovery
when the short run economic growth starts to increase after recession
output gap
the difference between actual growth and trend growth
economic shocks
sudden unexpected events that will effect the macroeconmey, especially the growth rate
demand side shocks -
unexpected changes and significant changes in the Level of aggregate demand
supply side shocks
unexpected and significant changes the price of factors of production or the availability
full unemployment
the level of unemployment where those who are economically inactive are not counted, the people who are able and willing to work can
cyclical employment
unemployment caused by infufficant aggregate demand within an economy