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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
Aggregate demand (AD)
the total demand for an economy's goods and services at a given price level in a given time period
26
Consumer expenditure
spending by households on goods and services
27
Dissaving
consumer expenditure exceeds income with people or countries drawing on past savings or borrowing
28
Saving
Income minus consumption
29
Investment
spending on capital goods
30
Government spending
the total of local and national government expenditure on goods and services
31
Net exports
exports minus imports
32
Exchange rate
the price of one currency in terms of another
33
Aggregate supply
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
34
Short-run aggregate supply
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
35
Long-run aggregate supply
the total output of a country supplied in the period when prices of factors of production have fully adjusted
36
Average cost
the cost per unit of output
37
Supply-side shocks
large and unexpected changes in short-run aggregate supply
38
Keynesians
people who agree with the view of economist John Maynard Keynes that government intervention is needed to achieve full employment
39
New classical economists
economists who think that the LRAS curve is vertical and that the economy will move toward full employment without government intervention
40
Macroeconomic equilibrium
the output and price level achieved where AD equals AS
41
Economic development
an increase in welfare and quality of life
42
Nominal (or money) GDP
total output measured in current prices
43
Real GDP
total output measured in constant prices
44
Base year
the reference point in time. It is the starting year in an index and is given a value of 100
45
Constant prices
prices by base year
46
Price index
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
GDP deflator
the price index of all domestically produced goods and services
48
Recession
a decline in real GDP over at least two consecutive quarters
49
Unemployment
the state of being willing and able to work but not having a job
50
Homemakers
people who look after the households of their own families
51
Economically inactive
people who are not in the labour force
52
Labour force
the employed and the unemployed
53
Economically active
people in the labour force
54
Labour force participation rate
the proportion of the population that are of working age and who are either working or actively seeking work
55
Levels of unemployment
the number of workers who are unemployed
56
Unemployment rate
unemployed workers as a percentage of the labour force
57
Employment rate
employed workers as a percentage of the population of working age
58
Discouraged workers
workers who would like a job but who have given up actively seeking work after a period of trying to find work
59
Claimant count measure
a measure of unemployment based on those claiming unemployment benefits
60
Labour force survey measure
a measure of unemployment based on a survey that identifies people who are actively seeking a job
61
Sampling error
the people being surveyed having different characteristics or experiences to the rest of the population
62
Frictional unemployment
unemployment that is temporary and arises when workers are in-between jobs
63
Voluntary unemployment
unemployment resulting from the unemployed choosing not to accept jobs at a going wage rate
64
Search unemployment
unemployment that exists when people take time looking for a job they are willing to accept
65
Casual unemployment
unemployment that occurs when people have left one short-term job and before they take up another short-term job
66
Seasonal unemployment
Unemployment arising at particular times of the year when demand for the product falls
67
Structural unemployment
unemployment caused as a result of the changing structure of economic activity
68
Regional unemployment
unemployment arising from a decline in job vacancies in a particular area of the country
69
technological unemployment
unemployment caused by advances in technology
70
International unemployment
unemployment arising when a country loses its international competitiveness in producing a product or products
71
Cyclical unemployment
unemployment that results from a lack of aggregate demand
72
Underemployment
a situation where people are working fewer hours than they would like or working in jobs that they are overqualified for
73
Barter
direct exchange of goods and services for other goods and services
74
Price stability
a low and stable inflation rate
75
Inflation rate
the percentage rise is an economy's price level over a period of time
76
Inflation
a sustained increase in an economy's price level over a period of time
77
Price level
the average of all prices in an economy
78
Creeping inflation
a low rate of inflation
79
Hyperinflation
a very high rate of inflation, which may result in people losing confidence in the currency
80
Deflation
a sustained fall in the price level
81
Disinflation
a fall in the inflation rate
82
Annual average method
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
Year-on-year method
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
Consumer price index (CPI)
a measure that shows the average change in the prices of representative basket of products purchased by households
85
Money values
values at the prices operating at the time
86
Real data
data adjusted for inflation
87
Cost-push inflation
inflation caused by increases in costs of production
88
Wage-price spiral
higher wages causing prices to rise which, in turn, push up wages and so on
89
Demand-pull inflation
inflation caused by increases in aggregate demand not matched by equivalent increases in aggregate supply
90
Monetarists
economics who consider that inflation is caused by excessive growth in the money supply
91
Menu costs
costs to firms of having to change prices due to inflation
92
Shoe leather costs
costs of moving money around in the search of the highest interest rate
93
Fiscal drag
the income of people and firms being pushed into higher tax brackets as a result of inflation
94
Inflationary noise
confusion over relative prices caused by inflation
95
Total cost
the sum of fixed costs and variable costs
96
Debtors
people, firms or governments who owe money

Economics (11 decks)

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