Revision cards

Question 1

Macroeconomic objectives main (4)

Answer 1

sustainable economic growth
low and stable inflation
low unemployment
equilibrium of balance of payments

Question 2

minor macroeconomic objectives

Answer 2

budget equilibrium
Income equality
No pollution

Question 3

measure of rate of inflation

Answer 3

CPI
5500 families are surveyed
A basket for 710 goods
20000 stores from 141 location
Change in prices is weighed
Average household spending
Given an index number for comparison

Question 4

Measures of unemployment list them

Answer 4

Claimant count
Labour force survery

Question 5

What is claimant count

Answer 5

Measure of how many people collecting benefits for unemployment every month from UCS

Question 6

what is the labour force survey

Answer 6

It is when people fill in a survey if they’re unemployed. Shows they’re unemployed for the past 4 weeks, looking for a job for past 4 weeks, can work within the next 2 weeks

Question 7

How do you calculate index number

Answer 7

Change from base index number

Question 8

Formula for terms of trade

Answer 8

Average index price of exports/ average index price of imports *100

Question 9

formula for multiplier effect

Answer 9

Change in leakage/change in income

Question 10

List conflict of macroeconomic objectives

Answer 10

Low unemployment and Low inflation (philips curve)

Growth and inflation

growth vs income inequality

low unemployment vs growth

Question 11

link between interest rates and exchange rates (hot money)

Answer 11

Proportional

Question 12

expansionary monetary polcies

Answer 12

Increase money supply
- fall in I.R
- fall in E.R

Question 13

Expansionary fiscal policies

Answer 13

Increase in government spending
Fall in taxation

Question 14

Supply side market based (general)

Answer 14

Tax reforms
Labour market reforms
Competition policies

Question 15

Give examples of the general market based SSP

Answer 15

Tax reforms:
- Lower income tax
- lower corporation tax

Labour market reforms
- reduce minimum wage
- reduce trade union power
- reduce benefits

Competition policies
- privatisation
- deregulation
- trade liberalisation

Question 16

Give examples of interventionist SSPs

Answer 16

• Subsidies and tax breaks for increase investment
• government spending on training and education
• government sending on infrastructure

Question 17

School of thoughts of AS

Answer 17

Keynsian and Classical

Question 18

What does keynsian economist believe for LRAS

Answer 18

LRAS, economies do not work at full capacity

Question 19

What are the 4 development theories

Answer 19

Harrod Domar model
Prebisch singers hypothesis
Dutch disease
Lewis model

Question 20

Explain the lewis model

Answer 20

Transistion of an economy from rural agriculture sector and urban manufacturing sectors lead to fall in income inequality due to a raise in wages

Question 21

Explain the Harrod Domar model

Answer 21

Economic growth comes to developing economies when their is savings and investment which closes the saving gap

Question 22

What is the dutch disease

Answer 22

When a primary commodity leads to an appreciation of the currency, this harms other exporting industries of the economy

Question 23

What is prebisch singers hypothesis

Answer 23

Due to primary commodities being compared to manufacturing goods their value will fall over time