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Economics > The macroeconomy (AS level) > Flashcards

The macroeconomy (AS level) Flashcards

1
Q

National income

A

a country’s total output

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2
Q

National income statistics

A

measures of the total output (income and expenditure ) of an economy

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3
Q

Gross domestic product (GDP)

A

the total output produced in a country

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4
Q

Gross national income (GNI)

A

GDP plus net income from abroad

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5
Q

Net property income from abroad

A

receipts of profit, rent and interest earned on the ownership of foreign assets minus payments of profit, rent and interest to non-residents

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6
Q

Compensation of employees

A

income of workers who work in another country for a short period of time.

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7
Q

Gross national disposable income

A

GNI plus net transfers of workers’ income to their relatives to and from other countries.

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8
Q

Multinational companies (MNCs)

A

firms that operate in more than one country

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9
Q

Circular flow of income

A

a simplified view of how income flows around the economy

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10
Q

Output method

A

a way of measuring GDP by calculating the total production of goods and services of the country

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11
Q

Value added

A

the difference between the price at which products are sold and the price of goods and services used in their production

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12
Q

Income method

A

a way of measuring GDP by totalling all the incomes earned in producing the country’s output.

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13
Q

Expenditure method

A

a way of calculating GDP by totalling all the spending on the country’s output

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14
Q

Market prices

A

Prices paid by consumers; they take into account indirect taxes and subsidies.

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15
Q

Basic prices

A

prices charged by producers before the addition of indirect taxes and the deduction of subsidies

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16
Q

Gross investment

A

total spending on capital goods

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17
Q

Net domestic product (NDP)

A

GDP minus depreciation

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18
Q

Net national income (NNI)

A

gross national income (GNI) minus depreciation

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19
Q

Net investment

A

additions to the capital stock

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20
Q

Depreciation (of capital goods)

A

the value of capital goods that have worn out or become out of date

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21
Q

Open economy

A

an economy that is involved in trade with other economies

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22
Q

Closed economy

A

an economy that does not trade with other countries

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23
Q

Injections

A

additions to the circular flow of income

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24
Q

Leakages

A

withdrawals from the circular flow of income

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25
Q

Aggregate demand (AD)

A

the total demand for an economy’s goods and services at a given price level in a given time period

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26
Q

Consumer expenditure

A

spending by households on goods and services

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27
Q

Dissaving

A

consumer expenditure exceeds income with people or countries drawing on past savings or borrowing

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28
Q

Saving

A

Income minus consumption

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29
Q

Investment

A

spending on capital goods

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30
Q

Government spending

A

the total of local and national government expenditure on goods and services

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31
Q

Net exports

A

exports minus imports

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32
Q

Exchange rate

A

the price of one currency in terms of another

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33
Q

Aggregate supply

A

The total output (real GDP) the producers in an economy are willing and able to supply at a given price level in a given time period

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34
Q

Short-run aggregate supply

A

the total output of an economy that will be supplied when there has not been enough time for the prices of factors of production to change

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35
Q

Long-run aggregate supply

A

the total output of a country supplied in the period when prices of factors of production have fully adjusted

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36
Q

Average cost

A

the cost per unit of output

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37
Q

Supply-side shocks

A

large and unexpected changes in short-run aggregate supply

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38
Q

Keynesians

A

people who agree with the view of economist John Maynard Keynes that government intervention is needed to achieve full employment

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39
Q

New classical economists

A

economists who think that the LRAS curve is vertical and that the economy will move toward full employment without government intervention

40
Q

Macroeconomic equilibrium

A

the output and price level achieved where AD equals AS

41
Q

Economic development

A

an increase in welfare and quality of life

42
Q

Nominal (or money) GDP

A

total output measured in current prices

43
Q

Real GDP

A

total output measured in constant prices

44
Q

Base year

A

the reference point in time. It is the starting year in an index and is given a value of 100

45
Q

Constant prices

A

prices by base year

46
Q

Price index

A

a way of comparing changes in the price level over time. The value of the first year in the index (base year) is set at 100 and the value of each following year is a percentage of it

47
Q

GDP deflator

A

the price index of all domestically produced goods and services

48
Q

Recession

A

a decline in real GDP over at least two consecutive quarters

49
Q

Unemployment

A

the state of being willing and able to work but not having a job

50
Q

Homemakers

A

people who look after the households of their own families

51
Q

Economically inactive

A

people who are not in the labour force

52
Q

Labour force

A

the employed and the unemployed

53
Q

Economically active

A

people in the labour force

54
Q

Labour force participation rate

A

the proportion of the population that are of working age and who are either working or actively seeking work

55
Q

Levels of unemployment

A

the number of workers who are unemployed

56
Q

Unemployment rate

A

unemployed workers as a percentage of the labour force

57
Q

Employment rate

A

employed workers as a percentage of the population of working age

58
Q

Discouraged workers

A

workers who would like a job but who have given up actively seeking work after a period of trying to find work

59
Q

Claimant count measure

A

a measure of unemployment based on those claiming unemployment benefits

60
Q

Labour force survey measure

A

a measure of unemployment based on a survey that identifies people who are actively seeking a job

61
Q

Sampling error

A

the people being surveyed having different characteristics or experiences to the rest of the population

62
Q

Frictional unemployment

A

unemployment that is temporary and arises when workers are in-between jobs

63
Q

Voluntary unemployment

A

unemployment resulting from the unemployed choosing not to accept jobs at a going wage rate

64
Q

Search unemployment

A

unemployment that exists when people take time looking for a job they are willing to accept

65
Q

Casual unemployment

A

unemployment that occurs when people have left one short-term job and before they take up another short-term job

66
Q

Seasonal unemployment

A

Unemployment arising at particular times of the year when demand for the product falls

67
Q

Structural unemployment

A

unemployment caused as a result of the changing structure of economic activity

68
Q

Regional unemployment

A

unemployment arising from a decline in job vacancies in a particular area of the country

69
Q

technological unemployment

A

unemployment caused by advances in technology

70
Q

International unemployment

A

unemployment arising when a country loses its international competitiveness in producing a product or products

71
Q

Cyclical unemployment

A

unemployment that results from a lack of aggregate demand

72
Q

Underemployment

A

a situation where people are working fewer hours than they would like or working in jobs that they are overqualified for

73
Q

Barter

A

direct exchange of goods and services for other goods and services

74
Q

Price stability

A

a low and stable inflation rate

75
Q

Inflation rate

A

the percentage rise is an economy’s price level over a period of time

76
Q

Inflation

A

a sustained increase in an economy’s price level over a period of time

77
Q

Price level

A

the average of all prices in an economy

78
Q

Creeping inflation

A

a low rate of inflation

79
Q

Hyperinflation

A

a very high rate of inflation, which may result in people losing confidence in the currency

80
Q

Deflation

A

a sustained fall in the price level

81
Q

Disinflation

A

a fall in the inflation rate

82
Q

Annual average method

A

a way of calculating the inflation rate by comparing the average level of prices during the twelve-month period with the average level in the previous twelve months

83
Q

Year-on-year method

A

a way of calculating the inflation rate by comparing the percentage change in the price level for a given month with that of the same month of the previous year

84
Q

Consumer price index (CPI)

A

a measure that shows the average change in the prices of representative basket of products purchased by households

85
Q

Money values

A

values at the prices operating at the time

86
Q

Real data

A

data adjusted for inflation

87
Q

Cost-push inflation

A

inflation caused by increases in costs of production

88
Q

Wage-price spiral

A

higher wages causing prices to rise which, in turn, push up wages and so on

89
Q

Demand-pull inflation

A

inflation caused by increases in aggregate demand not matched by equivalent increases in aggregate supply

90
Q

Monetarists

A

economics who consider that inflation is caused by excessive growth in the money supply

91
Q

Menu costs

A

costs to firms of having to change prices due to inflation

92
Q

Shoe leather costs

A

costs of moving money around in the search of the highest interest rate

93
Q

Fiscal drag

A

the income of people and firms being pushed into higher tax brackets as a result of inflation

94
Q

Inflationary noise

A

confusion over relative prices caused by inflation

95
Q

Total cost

A

the sum of fixed costs and variable costs

96
Q

Debtors

A

people, firms or governments who owe money

Economics (11 decks)

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