review 1 continued Flashcards

1
Q

opportunity cost

A

measures the cost of any economic choice in terms if the next best alternative foregone

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2
Q

explain the difference between capital good and consumer goods

A

capital goods that are used to make consumer goods and services.

consumer goods and services are products which satisfy our needs and wants directly

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3
Q

net immigration

A

net immigration means that more people are immigrating to a country from overseas than are emigrating from that country

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4
Q

explain the likely impacts of immigration of younger skilled workers on a economy production possibility frontier

A

the ppf is determined by the factors of production land labour capital and enterprise available to an economy

immigration of skilled workers will cause an increase in the available supply of labour

which will shift the ppf outwards

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5
Q

how is the CPI calculated

A

basket of good to the family expenditure survey and then compared to a base year being used for a comparison in the index

items are weighted according to proportion of total expenditure on each product

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6
Q

the difference between the clamorous count and ILO

A

the claimant count does not include people in full time employment if they are seeking part time work and the ILO measure does

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7
Q

state two reason s for frictional unemployment

A

new workers entering the workforce who have not found a job yet

workers who have left one job and are yet to find another

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8
Q

two limitations of using GDP to compare standard of living between countries

A

GDP does nit indicate the level of inequality

it does not allow for indicators such as pollution

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9
Q

use the concept of the multiple to explain how an increase in government spending

A

government spending is an injection into the circular flow

which creates new demand for goods and services

because one persons spending is another so income further rounds of spending are stimulated

creating a bigger final effect on the level of aggregate demand

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10
Q

animal spirits influences the level of bussinesss investments

A

animal spirits refer to how expectation affect6 the willingness of business to commit funds towards capital investment in their chosen markets
it also explains how the economic cycle could be volatile because of the changing spirits of the businessmen involved rather than because of rational decisions based on calculation of returns

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11
Q

aggregate demand

A

the total valve of planned expenditure on goods and services within an economy in given period of time

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12
Q

in the short run, a rise in uk budget deficit is most likely to lead to an increase in

A

inflation

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13
Q

state four most commonly used measures of macroeconomic performance

A

GDP growth
inflation
unemployment
BOP

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14
Q

explain how indirect tax might be a cause of cost push inflation in an economy

A

indirect taxes are a cost of production and so shift AS curve inwards which raises the prices level

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15
Q

define the term the rate of employment

A

the proportion of people available in the labour force aged from 16 to 64 years

who are in work

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16
Q

explain one possible reason for a fall in the rate of employment

A

a fall in aggregator demand resulting in lower national output;
wages rising above the previous equilibrium

17
Q

how would an economist define the concept of full employment

A

when the number of job vacancies equals the number of people actively seeking work

18
Q

explain two reasons why the Monetary policy committee of the Bank of England introduced quantitive easing

A

in order to create inflationary pressure at a tike of serve disnflation

to create demand for government bonds

19
Q

difference between GNP and GNI

A

GNI is also known as GNP which = GDP plus net property income from abroad. net income from award included interest…

GNP included the value of all goods and services produced but nationals of a country whether in that country or abroad

20
Q

the current account

A

an account measurlthe flows of money trade in and out of an economy

21
Q

the current account measures

A

trade in goods
trade in services
income
debt repayments

22
Q

what is the difference between CPIH and CPI

A

CPIH includes morghates which is most households biggest expense

23
Q

difference between ILO and claimant count

A

the claimant count measure unemployment through the number of people claiming job seeker allowance

ILO is a survey. it seeks to measure unemployment by counting the people who have been out of work and have been looking for wok for at leat 4 weeks and are ready to start work in the next 2 week

24
Q

asymmetric information

A

where buyers have more information than sellers

25
Q

symmetric information

A

where buyers and sellers have the same information

26
Q

output gap

A

the difference between actual and potential output