Term 3: Glossary Words

Question 1

what is aggregate demand?

Answer 1

sum or total value of all spending/demand on final (finished) goods and services produced by a nation and measured over a period of time

Question 2

what is balance of trade?

Answer 2

difference between value of a country’s exports and value of its imports over a specific period of time
formula:
value of exports - value of imports

Question 3

what is a bilateral agreement?

Answer 3

agreement between two nations

Question 4

what are bonds?

Answer 4

a loan to a company/government that pays investors a fixed rate of interest

Question 5

what is a budget?

Answer 5

list of income and likely expenditures

Question 6

what is budgetary policy?

Answer 6

macroeconomic or aggregate demand management strategy involving government’s estimates of expected value of its receipts + expected value of its outlays

Question 7

what is cash rate?

Answer 7

official price of borrowing money; interest rate that applies to the short-term money market

Question 8

what does it mean to be a consumer?

Answer 8

to purchase goods and services for direct use or ownership

Question 9

what is cost inflation?

Answer 9

sustained increase in price of goods and services caused by producers passing on increased production costs to consumers

Question 10

what is demand inflation?

Answer 10

price increases that result from excess of demand over supply for economy as a whole

Question 11

what is deregulation?

Answer 11

removal of unnecessary direct government controls, restrictions, and supervision in various areas of the economy

Question 12

what is economic growth?

Answer 12

measurement of the increase in a country’s gross domestic product (GDP)

Question 13

what is an economy?

Answer 13

all activities undertaken for purpose of production, distribution, and consumption of goods and services in a region or country

Question 14

what are exports?

Answer 14

goods and services sold by local businesses to overseas consumers

Question 15

what is fiscal policy?

Answer 15

use of the federal government’s budget to achieve economic objectives

Question 16

what is free trade?

Answer 16

no artificial barriers to trade between nations

Question 17

what is gross domestic product (GDP)?

Answer 17

total value of all goods and services produced in a country in given period of time (usually a year)

Question 18

what are imports?

Answer 18

goods and services purchased by local consumers from overseas businesses

Question 19

what is income?

Answer 19

money received on a regular basis from work, property, business, investment, or welfare

Question 20

what is inflation?

Answer 20

general rise in prices across all sectors of the economy

Question 21

what is labour?

Answer 21

human skills and effort required to produce goods and services

Question 22

what is the labour market?

Answer 22

buying and selling of labour

Question 23

what is laissez-faire?

Answer 23

no government interference in the economy

Question 24

what is macroeconomics?

Answer 24

branch of economics that emphasises central role played by the level of expenditure or aggregate demand

Question 25

what is a mark up?

Answer 25

fixed percentage or dollar figure added to the cost price of goods and services to determine selling price

Question 26

what is microeconomics?

Answer 26

branch of economics that studies smaller fragments/units making up the whole economy

Question 27

what is monetary policy?

Answer 27

the reserve bank using interest rates to achieve economic objectives

Question 28

what is a mortgage?

Answer 28

loan from a financial institution, such as a bank where something is held as security in case loan is not repaid, e.g. a house

Question 29

what is a multilateral agreement?

Answer 29

agreement between three or more nations

Question 30

what are multinational corporations (MNCs)?

Answer 30

large business organisations that have a home base in one country and operate partially or wholly owned businesses in other countries

Question 31

what are negative externalities?

Answer 31

production outcome that was not intended and negatively impacts our economy and/or society

Question 32

what is protection???

Answer 32

policy whereby a government gives local producers artificial advantage, e.g. imposes tariffs on imports

Question 33

what are qualitative measures?

Answer 33

determine/measure quality of our life and the economy by examination of a series of qualitative indicators, such as freedom or security

Question 34

what is quarterly?

Answer 34

every three months

Question 35

what are quotas?

Answer 35

quantity limits or targets for production or imports

Question 36

what is a recession?

Answer 36

relatively mild contraction in level of economic activity, resulting in reduced spending, rising unemployment, and slow rate of economic growth

Question 37

what is a regimen?

Answer 37

basket of goods and services whose prices are surveyed to calculate inflation

Question 38

what are subsides?

Answer 38

cash payment by government designed to help producers compete by enabling them to sell their product at a lower price than would otherwise occur

Question 39

what is a subsidy?

Answer 39

payment to a local producer

Question 40

what is sustainable?

Answer 40

able to last/continue for a long time

Question 41

what are tariffs?

Answer 41

tax on imports

Question 42

what is taxation?

Answer 42

government levy/revenue measure that can be used as part of the budget to affect level of prices, growth rate, and distribution of income