Unit 2- What Are The Economic Objectives Of The Government Flashcards
What is economic growth?
It refers to growth of output in the economy over time; a growth of real GDP over time.
What is full employment?
It is when everyone who is able and willing to work has a job.
What is price stability?
It means keeping inflation low.
What are the objectives of government policies?
Maintaining full employment, economic growth, achieving price stability and balancing exports and imports.
What is balancing exports and imports?
The government aims for a balance between exports and imports.
What does the fiscal policy aim for?
It is aimed to change the level of aggregate demand in the economy through changes in taxation and the government’s own spending.
What does interest rate policy aim to do?
It aims to change the level of aggregate demand in the economy by making changes to interest rate.
What do supply side policies aim to do to an economy?
They aim to increase the economy’s capacity to produce more goods and services.
What is gross domestic product (GDP)?
The total value of goods and services produced in the country in a year.
What is GDP per capita?
GDP divided by the total population.
What is the claimant count?
It measures the unemployment according to the number of people claiming unemployment related benefits.
What is the labour force survey?
A survey of a sample of households and counting people as unemployed if they are actively seeking work.
What is voluntary unemployment?
It is caused by people choosing not to work.
What are the six types of unemployment?
Voluntary unemployment, seasonal unemployment, frictional unemployment, structural unemployment, technological unemployment and cyclical unemployment.
What is seasonal unemployment?
Caused by seasonal workers not being employed in other times of the year.
