Y1 Measuring Macroeconomic Performance

Question 1

Macroeconomic targets

Answer 1

High employment
Price stability (low inflation)
Sustained economic growth
Improve trade balance

Question 2

The circular flow of income

Answer 2

Households give FoP and expenditure to firms
Firms give income and output to households

Question 3

Measuring GDP

Answer 3

Total value of goods
Total incomes
Total expenditure

Question 4

Injections

Answer 4

Investment (I)
Government spending (G)
Exports (X)

Question 5

Leakages

Answer 5

Savings (S)
Tax (T)
Imports (M)

Question 6

Aggregate demand

Answer 6

Total demand in an economy
C+I+G+(X-M)

Question 7

Components of UK demand

Answer 7

66% Consumption
26% Gov spending
10% Investment

Question 8

Keynesian model of AD-AS

Answer 8

The elasticity of AS depends on amount of spare capacity

Question 9

MPM

Answer 9

Marginal Propensity to Import

Question 10

Appreciation

Answer 10

Price of the pound rises relative to other currencies, so exports are expensive and imports are cheap.

Question 11

Depreciation

Answer 11

Price of the pound falls relative to other currencies, so exports are cheap and imports are expensive