Th2: Definitions 2

Question 1

Deflation

Answer 1

a persistent fall in prices of goods and services

Question 2

Deflationary policy

Answer 2

fiscal or monetary policy which is aimed at reducing aggregate demand

Question 3

Demand pull inflation

Answer 3

inflation caused by an increase in aggregate demand

Question 4

Depreciation

Answer 4

the reduction in the value of machinery over time

Question 5

Direct tax

Answer 5

taxes paid straight to the government by the individual taxpayer

Question 6

Disinflation

Answer 6

a reduction in the rate of inflation

Question 7

Disposable income

Answer 7

the money consumers have left to spend, after taxes have been taken away and benefits added

Question 8

Economic growth

Answer 8

an increase in the long term productive potential in the economy - an increase in the amount of goods and services which are produced, measured by an increase in real GDP

Question 9

Employed

Answer 9

someone who does more than 1 hour of paid work a week or is temporarily away from work on a government supported training scheme or does a minimum of 15 hours unpaid work for their family business - ILO definition

Question 10

Expansionary policy

Answer 10

fiscal or monetary policy which is aimed at increasing aggregate demand

Question 11

Exports

Answer 11

goods or services sold to foreigners that bring income into the country

Question 12

Export-led growth

Answer 12

economic growth arising from an increase in exports

Question 13

Fiscal policy

Answer 13

the use of borrowing government spending and taxation to manipulate the level of aggregate demand and improve macroeconomic performance

Question 14

Frictional unemployment

Answer 14

unemployment caused when people move between jobs and enter the job market

Question 15

Gross domestic product (GDP)

Answer 15

the value of goods and services produced in a country over a given period of time

Question 16

GDP per capita

Answer 16

total GDP divided by the population

Question 17

Gross investment

Answer 17

investment both to replace old machinery that has depreciated and to create / buy new ones

Question 18

Gross national income (GNI)

Answer 18

the value of goods and services produced by a country over a period of time plus net overseas interest payments and dividends

Question 19

Gross national product (GNP)

Answer 19

the value of goods and services produced by citizens of a country, whether they live in the country or not

Question 20

Government spending

Answer 20

spending by the government for the provision of goods and services