Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

IMC Unit 2 - Chapter 9 > Section 2 > Flashcards

Section 2 Flashcards

1
Q

what are the key socio-economic trends in the UK and explain their effects

A

Aging population

Pressure on government provision of:
• Healthcare
• Pensions

Growth in debt to GDP ratio due to government spending

• Currently in violation of EU upper limits

Climate change

• Trend towards lower carbon emissions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are key Economic Indicators in the US

A
  • Average weekly hours of production workers
  • Claims for unemployment insurance
  • New orders in manufacturing
  • Private housing permits
  • Yield curve slope shifts
  • Money supply
  • Consumer sentiment
  • Personal income
  • Data releases e.g. non-farm employment (payroll)
  • . Stock market price index
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are long term socio-economic trends globally?

A
  • UN –> climate change and sustainable development for poorer nations.

UN follows an integrated approach with low-carbon, high-growth transformation of the global economy. Envisioning this will lead to environmental stability, strong growth and economic diversification.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

In terms of economic indicators what is a leading indicator?

A

usually signals movement in advance of the wider economy and can be useful for economic prediction. For example, stock market trends occur before movements in the real economy.

Other leading indicators are consumers or business surveys, and money supply and credit growth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What leading indicator is published in the US?

A

The conference board publishes a composite leading indicator based on ten indicators to predict economic activity six to nine months ahead.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

In terms of economic indicators what is a lagged indicator?

A

usually change after the overall economy changes e.g. employment may move three or four quarters after output changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

In terms of economic indicators what is a coincident indicator?

A

move in step with the wider economy and include activity variables such as industrial production and national output (GDP). These can be useful in identifying peaks and trough in business cycles after the event, and they are subject to (often substantial) revisions over time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what % of global GDP does America contribute?

A

24.5%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what % of global GDP does the EU contribute?

A

16.5%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what % of global GDP does the UK contribute?

A

3.3%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what % of global GDP does the emerging and developing (as IMF defined) contribute?

A

60% (includes china, india, russia)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

talk about differences in investments and savings for emerging and developing vs developed countries

A

Emerging and developing countries appear to save and invest more proportionately than developed ones.

Developed economies (generally) have higher consumption levels and lower savings rates.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How much is US saving compared to investing of GDP

A

• US saved 18% and invested 19.6% of GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How much is EU saving compared to investing of GDP

A

• EU 24.4% and 20.9% respectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How much is Emerging countries saving compared to investing of GDP

A

• Emerging economies saved 41% and invested 40% of GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

how can a countries depth of the financial sector also (preferably) be measured compared to savings and investment as a % of GDP?

A

domestic credit made available to the private sector as a % of GDP

countries with less developed financial sectors have low numbers.

17
Q

how many phases does a typical business cycle have? and list these

A

4

1) expansionary
2) euphoric
3) recession
4) recovery

18
Q

describe the expansionary phase

A

production rises

inflation and interest rates are low

19
Q

describe the euphoric phase

A

leads to overconfidence and gives way to falling stock prices and rising interest rates and bankruptcies

20
Q

describe the recession phase

A

output and inventories are cut back

21
Q

describe the recovery phase

A

consumers regain confidence

demand and output rises

22
Q

what are economy wide fluctuations in economic activity observed via?

A
  • GDP/Income/Employment/Industrial production

* Boom and contraction

23
Q

Discuss length of economic cycles

A
  • Business cycles are generally accepted to last three to live years
  • There are many economic cyclical theories of varying length e.g. Kondratiev’s 60 year technological cycle
24
Q

What are causes of economic and financial cycles according to what base of ideas?

A

• Keynesian ideas suggest
o Fluctuations in demand
o The cycle of net credit creation suggests easy credit leads to speculative bubbles

25
Q

What is the basis of the circular flow theory?

A

That at a basic level (ignoring government and foreign sector) an economy can be thought of as households (workers/consumers) who supply inputs to firms, receive rewards in terms of wages and interest and spend those rewards on the outputs of firms.

The firms in turn use the inputs to produce outputs that the households can buy.

two main agents in the circular flow of income: what firms pay ultimately comes back to them

26
Q

what does the nature of circular flow suggest in terms of how overall activity in an economic system can be measured? and what is this referred to as?

A
  • the value of expenditure by firms on inputs
  • the value of outputs by firms
  • the value of purchases by consumers

In a simplified example these will yield identical results. Even when relaxing any restrictive assumptions this will hold true

National income accounting

27
Q

what is a basic measure of an economy’s output in any period?

A

GDP

28
Q

What is GDP?

A

the value of output produced by factors of production located within the domestic economy.

E.g. in the UK factors of production owned outside the UK e.g. foreign factory do not contribute to the UK’s GDP

29
Q

What is GNP?

A

GDP + net income from abroad (factors of production located outside the UK and foreign ownership of UK factors)

30
Q

what are final goods?

A

goods purchased by the ultimate user

31
Q

what are intermediate goods?

A

goods which are inputs in another production process

32
Q

What is nominal GDP?

A

GDP at current prices

33
Q

what is real GDP

A

GDP adjusted for changes in price levels over time i.e. removing the effect of inflation

34
Q

what is national income?

A

the total amount of money earned within a country.

35
Q

What does national income accounting measure?

A

National income accounting is a way to measure GDP (Y) – income measure

36
Q

What are leakages to circular flow theory?

A

o Leakages: Savings, tax, imports

37
Q

What are injections to circular flow theory?

A

o Injections: investment, government spending, exports

IMC Unit 2 - Chapter 9 (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions