Week 13 Content Flashcards
What is GDP?
Market value of all the final goods and services produced within a country in a given period of time
What does an increase in GDP mean?
Provides an indication of expansionary growth
What is disinflation?
Prices rising but at a slower rate
Formula for inflation
((Current Price - (Current Price - 1))/ Current Price - 1) x 100
What is equilibrium unemployment?
Level of unemployment whilst at equilibrium mark ( DL = W)
What is a depression?
A prolonged and deep recession
What is the circular flow of income?
Shows how resources and financial payments flow between households and firms
Examples of Injections
GS, I, X - monetary additions to economy
Examples of Leakages
M, S, T - withdrawals from circular flow of income
What are the 3 different approaches to calculating GDP?
Production, Income & Expenditure
What is GVA?
Measurement of the economic contribution from a sector or company towards the total production of goods and services. Shows influence of industries to economies
What are intermediate inputs?
Refers to all the material involved in the production process of a good/or service
What is the expenditure approach?
Some of all the expenditures (spending) within an economy
Does the expenditure method include intermediate inputs
No
What is the income method?
All income generated by economic activity, excludes transfer payments (payments where no goods and services are exchanged)
