Theme 2 Definitions Flashcards
(94 cards)
Actual growth
economic growth by changes in real GDP
Aggregate demand
The total level of demand in an economy at any give price at a given moment of time
Aggregate supply
The total amount of output in the economy at any given price at a given moment
Animal spirits
The level of confidence in business owners (keynes)
Balance of payments
A record of all financial dealings over a period of time between economic agents of one country to another
a record of all international transactions between economies, consisting of the financial, current and capital account
Base year
A year chosen as a good comparison is series of data when building an index; it is automatically given an index figure of 100
Boom
The peak of the trade cycle when growth is high
budget
where the government lays out their spending and taxation plan
budget deficit
when the government’s spending is higher than their tax revenue
budget surplus
When the government’s revenue is higher than their spending
Circular flow of income
A model of the economy that shows the flow of goods and services, the factors of production and money around the economy
claimant count
a measure of unemployment through the number of people receiving benefits for being unemployed every month
consumer price index
official measures used to calculate the rate of inflation, using a weighted basket of goods
consumption
consumer spending on goods and services
cost push inflation
inflation caused by a decrease in AS
current account
a record of the payments for the purchase and sale of goods and services as well as income and transfers
current account deficit
when more money leaves the country than enters, so it is negative
current account surplus
when more money enters the country than leaves, it is positive
cyclical unemployment
Unemployment caused by the fluctuating nature of the trade cycle which is influenced by the levels of AD
deflation
a persistent fall in the prices of goods and services
deflationary policy
fiscal or monetary policies which is aimed to reduce AD (contractionary)
demand pull inflation
Inflation caused by an increase in AD
depreciation (capital)
The reduction in the value of machinery over time
depreciation
a fall in the value of the currency in a free floating exchange rate system