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economics IAS u2 > u2 definations > Flashcards

u2 definations Flashcards

1
Q

economic growth

A
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2
Q

unemployment

A
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3
Q

inflation

A
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4
Q

balance of payments

A
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5
Q

national income

A
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6
Q

gross domestic product

A

the value of all final goods and services produced in an economy within a given time period

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7
Q

black market / hidden market

A
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8
Q

gdp / capita

A
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9
Q

fdi / foreign direct investment

A
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10
Q

gni / gross national income

A

total income generated by a countries factors of production, regardless of location

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11
Q

net factor income

A

income earned by domestic workers regardless of location - foreign income

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12
Q

green gdp

A
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13
Q

nominal gdp

A
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14
Q

real gdp

A
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15
Q

value

A

refers to the monetary worth
of goods and services produced, expressed in currency

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16
Q

volume

A

refers to the actual quantity of goods and services produced. It doesn’t consider price changes

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17
Q

basic price change

A

indirect taxes minus subsidies

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18
Q

net national income

A

gross national income, adjusted for depreciation

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19
Q

transfer payments

A
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20
Q

purchasing power

A
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21
Q

PPP ( purchasing power parity)

A
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22
Q

absolute PPP

A
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23
Q

relative PPP

A
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24
Q

economic growth rate

A

rate of change of real gdp

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25
Q

recession

A

an economy has experienced negative economic growth over at least two consecutive quarters

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26
Q

depression

A

a sustained period of significant economic decline

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27
Q

human development index

A

statistic by UN to assess a country’s overall progress in terms of social and economic well-being

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28
Q

inflation

A

persistent and general increase of prices in an economy

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29
Q

deflation

A

persistent and general decrease of prices in an economy over a year

30
Q

disinflation

A

a fall in the rate of inflation. its a decreased rate of inflation, but inflation still exists

31
Q

hyperinflation

A

where the prices of all goods and services rise uncontrollably over a defined time period

32
Q

reflation

A

rise of gdp that occurs following a recession

33
Q

stagflation

A

a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high

34
Q

consumer price index or CPI

A
35
Q

producer wholesale price index (PPI)

A

used to measure the change in the price of typical basket of goods bought and sold by the manufacturers of an economy

36
Q

demand pull inflation

A

Excess demand for goods and services

37
Q

cost push inflation

A

Increase in production costs for businesses

38
Q

the population of working age

A

all people within a certain age range, between statutory age for leaving school and state retirement age

39
Q

unemployed

A

those without job, who want a job and have actively looked for work in the last 4 weeks and are available to work in the next 2 weeks

40
Q

employed

A

those who have work, and work for atleast 1 hour of paid work per week

41
Q

the labour force

A

made up of those in employment and those unemployed, the economically active population

42
Q

active population

A

those in work or actively seeking work, also known as the
labour force

43
Q

underemployed

A

those who want to work more hours but cant find the work

44
Q

frictional unemployment

A
45
Q

structural unemployment

A
46
Q

seasonal unemployment

A
47
Q

cyclical unemployment

A
48
Q

Real wage inflexibility

A

refers to the stickiness of wages in an economy, meaning they don’t adjust quickly
to changes in economic conditions, particularly inflation

49
Q

Demand-side

A

refers to the demand for labour from firms

50
Q

supply side

A

refers to the supply for labour for firms

51
Q

shoe leather costs

A

the indirect costs people incur when they hold less cash due to high inflation.
It’s a metaphorical term referencing the idea that more frequent trips to the bank (which involved more walking in the past) would wear out your shoes faster.

52
Q

balance of payments

A

the capital inflow and outflow of a country from international transaction over a period of time

53
Q

balance of trade of goods

A

the difference between the value of visible exports and visible imports of goods

54
Q

balance of trade of services

A

difference between value of invisible exports and invisible imports of services

55
Q

primary income

A

income that results from the loan of factors of production
abroad.

56
Q

secondary income

A

is when income is transferred between countries. Money is
received without a corresponding output.

57
Q

trade in goods / trade in visible

A

trade in raw materials, semi manufactured and finished manufactured goods

58
Q

aggregate demand

A

total demand or expenditure in an economy at a given price

59
Q

wealth effect

A

as real wealth falls, consumption falls

60
Q

savings ratio

A

proportion of disposable income that people save

61
Q

gross investment

A

the total amount of money spent on acquiring new assets that will be used for production in the future.

62
Q

investment

A

when firms spend on capital goods

63
Q

net investment

A

represents the
actual addition to the economy’s capital stock after accounting for depreciation, reflects net increase in productive capacity as a result of investment

64
Q

keynesian theory of consumption

A

income is the most important determinant of consumption - as income rises, households prefer to save more and consumption falls

65
Q

accelerator effect

A

effects relationship between planned capital investment and the rate of change of national income

66
Q

circular flow of income

A

the movement of spending and income throughout the economy

67
Q

multiplier

A

process where any shift in AD will lead to an even greater shift in national output

68
Q

mpc

A

proportion of additional income that a person or household spends on consumption rather than saving it

69
Q

output gap

A

difference between actual level of real gdp and estimated long term value

70
Q

fdi

A

flows of money between countries where one firm buys or sets up anther firm in another country, its a method of injection

71
Q
A

economics IAS u2 (7 decks)

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