Section 3 Economic Performance Flashcards

1
Q

What is meant by the long run trend rate of growth

A

The avg increase in real GDP over time

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

What is meant by the economic cycle

A

Short run fluctuations in economic activity around the long -run trend rate of growth - changes in actual GDP

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

What demand-side factors can cause changes in the economic cycle

A

Mainly caused by changes in AD
Consumer + business confidence
Changes in wealth factors
Government policy
Globalisation
Exchange rate factors
The accelerator and the multiplier

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

What supply side factors can cause changes in the economic cycle

A

Changes in costs of production
Supply side shocks

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

What is an output gap

A

The different between the actual output and potential output

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

What is meant by shortrun economic growth

A

An increase in real output mainly caused by increases in AD

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

How can falls in costs of production cause sr economic growth

A

Lower costs means firms are willing to increase output shirt right of SRAS

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

What is meant by LR economic growth

A

An increase in productive capacity of an economy
Shown by an outward short of LRAS

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

What are capital goods

A

Goos used in the production process

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

What is an outward short of LREG in PPF caused by

A

Aggregate supply

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

What is inflation

A

Sustained increase in the general PL in an economy

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

How is inflation measured

A

The percentage change in the CPI

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

What is deflation

A

A sustained decrease in the general price level

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

What is disinflation

A

Where the rate of inflation is still falling but still positive , prices are rising at a slower rate

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

What is hyperinflation

A

Excessively high rates of inflation - over 50%

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

What is meant by price stability

A

When inflation remains broadly constant over time

17
Q

How doo we measure the size of an economy

A

National income - common measure of NI is GDP

18
Q

What is GDP

A

The total value of goods and services produces within the boundaries of an economy in a given period of time

19
Q

How do we measure GDP

A

Output,expenditure, and income measure

20
Q

What are 2 reasons why GDP can increase

A

More output is produced
Prices have risen

21
Q

How do we measure economic growth

A

% change in REAL GDP - measured over a quarter of a year

22
Q

What do constant prices show

23
Q

What do current prices show

A

Nominal GDP

24
Q

What is a recession

A

2 consecutive quarters of negative real GDP

25
What is real GDP per capita
Real GDP per person Good indicator of living standards
26
What is economically active
Those aged 16+ who are either in employment of unemployed
27
What is economically inactive
Those people not actively seeking work
28
What is the difference between employment and unemployment
If you are employed you have a job Unemployment is for those without a job , have been actively seeking work in the past 4 weeks and are available to start work in 2 weeks
29
how to measure unemployment
Labour force survey
30
How to calculate employment rate
Number employed/ working population X 100
31
What is unemployment rate calculation
Number unemployed/ economically active X 100
32
How to calculate economic inactivity
Economically inactive / working population X 100
33