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Economics > Theme 2 Economics > Flashcards

Theme 2 Economics Flashcards

1
Q

Real Values

A

Values that have adjusted to remove the effects of inflation. The effects are removed using an index number that represents the changes in prices and the results are called constant values

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2
Q

Nominal Values

A

Values that are measured in money terms. Nominal figures are the unadjusted, current values

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3
Q

Inflation

A

A general and sustained increase in prices, measured by a change in a weighted index of prices such as the CPI

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4
Q

Deflation

A

A fall in the general level of prices, ie negative inflation

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5
Q

Disinflation

A

A fall in the rate of inflation, ie prices are rising more slowly

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6
Q

Retail Price Index (RPI)

A

An index used to measure inflation that includes housing costs such as mortgage interest repayments

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7
Q

Demand-Pull Inflation

A

An increase in the general level of prices caused by increased consumption, investment, government spending or net exports

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8
Q

Cost-Push Inflation

A

An increase in the general level of prices caused by increased production costs such as a rise in wages or a fall in the exchange rate (imports expensive)

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9
Q

Money Supply

A

The amount of spending power in an economy. It includes cash and bank deposits. Monetarists believe that an increase in the money supply has a direct relationship with inflation

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10
Q

Workforce

A

A measure of people of working age who are willing and able to work

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11
Q

Claimant Count

A

A measure of unemployment using the number of claimants of JSA

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12
Q

Labour Force Survey

A

A measure of unemployment of those out of work in the last 4 weeks and ready to start in the next 2 weeks

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13
Q

Underemployment

A

A situation in which a worker is employed but wants to work more hours

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14
Q

Unemployment

A

A situation in which someone is willing and available to work, but is not currently employed

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15
Q

Inactivity

A

A measure of people of working age who are either unwilling or unable to work

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16
Q

Real Wage Unemployment

A

A measure of people who are unwilling to work at the going wage rate. Classical economists believe that wages that are kept artificially above the market-clearing wage are a main cause of unemployment

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17
Q

Demand-Deficit Unemployment

A

Also known as cyclical unemployment, this is caused by a lack of aggregate demand in an economy such as during a recession.

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18
Q

Structural Unemployment

A

A measure of workers who lose jobs in a declining industry and do not have the skills to join other industries

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19
Q

Frictional Unemployment

A

A measure of people who are between jobs

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20
Q

Seasonal Unemployment

A

A measure of people who have jobs only at certain times of the year such as skiing instructors

21
Q

Investment Income

A

The reward for investments in other countries. It comprises interest, profit and dividends

22
Q

Current Transfers

A

The payment of money across international boundaries that has no corresponding output

23
Q

Current Account Surplus

A

Where inflows on the current account of the balance of payments are greater than outflows

24
Q

Current Account Deficit

A

Where outflows on the current account on the balance of payments are greater than inflows

25
Q

Aggreggate Demand (AD)

A

The total planned expenditure on goods and services produced in the UK

26
Q

Aggreggate Supply (AS)

A

The total planned output of goods and services in the UK

27
Q

Animal Spirits

A

The forces that make markets move in large booms and busts, as people buy and sell impulsively rather than calmly, using purely rational behaviour

28
Q

Trade Cycle

A

The pattern of economic growth which changes from booms to recessions for slow growth in a fairly regular pattern

29
Q

Fiscal Policy

A

The deliberate manipulation of government spending and taxation in order to influence the level of AD in the economy

30
Q

Bottlenecks

A

Where restrictions in the capacity to increase production occur, meaning that prices will start to rise as output rises

31
Q

Wealth Effect

A

The effect on incomes or spending when assets values change

32
Q

Injections

A

Flows into the circular flow of income comprising investment, government spending and exports

33
Q

Withdrawals

A

Flows out of the circular flow of income comprising savings, tax and imports

34
Q

Marginal Propensity to Withdraw (MPW)

A

A measure of how much of any extra pound earned is saved, taxed or spent outside the economy on imports

35
Q

Marginal Propensity to Consume (MPC)

A

A measure of how much of any extra pound earned is spent within the economy

36
Q

Actual Economic Growth

A

An increase in real GDP

37
Q

Potential Economic Growth

A

An increase in capacity in the economy

38
Q

Export-Led Growth

A

The economic growth caused by rises in net exports. It has the benign effect of stimulating the domestic economy while improving the trade balance

39
Q

Output Gap

A

The difference between actual and potential GDP growth in GDP

40
Q

Quantitative Easing (QE)

A

The purchase of gilts and other illiquid assets as a means of making credit easier to access

41
Q

Budget (or Fiscal) Deficit

A

The amount by which government spending exceeds revenues. The UK has run a budget deficit since 2001

42
Q

Budget (or Fiscal) Surplus

A

The amount by which tax revenues exceed government spending. The next budget surplus in the UK is expected in 2018

43
Q

Stagflation

A

A stagnant (not growing) economy that is also suffering from inflation

44
Q

Deregulation

A

The process of reducing government rules and restrictions on businesses

45
Q

Infrastructure

A

The physical and organisational framework needed for an economy to operate efficiently

46
Q

Trade Unions

A

Organisations of workers that exist to promote the welfare of their members

47
Q

Phillips Curve

A

An observation of a trade-off between unemployment and inflation

48
Q

Trade-Off

A

When one factor can only improve at the expense of another

49
Q

Fiscal Stance

A

The position that the government takes on fiscal policy

Economics (1 decks)

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