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econ (for realz this time) > year 2 macro definitions > Flashcards

year 2 macro definitions Flashcards

1
Q

Exchange rates

A

the price of a currency in terms of another

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2
Q

Fixed exchange rates

A

when 2 currencies are exchanged at a set price

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3
Q

floating exchange rates

A

when the price of a currency is determined by the free market

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4
Q

FOREX

A

Foreign exchange market

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5
Q

international competitiveness

A

the level of competitiveness between countries

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6
Q

Marshall lerner condition

A

devaluation of a currency improves the current account BOP

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7
Q

causes of globalization

A

Improved transport
Improved technology
Firms exploiting economies of scale
Reduced trade barriers
Growth of global financial system

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7
Q

Terms of trade calculation

A

average price of exports / average price of imports

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8
Q

Terms of trade

A

A measure of relative competitiveness

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9
Q

MNC

A

Multinational corporation

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9
Q

developed economies

A

a country with an abundance of wealth

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9
Q

Primary sector

A

the sector of the economy that produces raw materials

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9
Q

mobility of capital

A

the ease with which capital can be moved across borders

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9
Q

Comparative advantage

A

when a country can produce a commodity at a lower opportunity cost than others

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10
Q

absolute advantage

A

when a country produces a commodity with the best quality and at a faster rate than any others

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10
Q

Tertiary sector

A

the sector of the economy which produces services

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10
Q

Consequences of globalization

A

Greater trade in goods and services
More FDI
Greater transfer of technology
greater specialization
Greater labour migration
Development of global brands

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11
Q

Sustainable growth

A

growth which meets the needs of current nations without compromising the ability of future generations to meet their needs

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11
Q

Secondary sector

A

the sector of the economy which produces goods for consumption

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11
Q

Tariffs

A

A tax on imports

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12
Q

Quotas

A

A quantitative maximum on the level of imports

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12
Q

Fledging industry

A

Industries which posses comparative advantage but do not yet have economies of scale

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13
Q

Technical barriers to trade

A

Ways of increasing product compliance costs which increases the cost to those exporting into the country

14
Q

Intellectual property laws

A

Laws protecting intellectual creations

14
Q

Domestic subsidies

A

Government help for domestic businesses facing financial problems

14
Q

Free trade area

A

When at least 2 states partially or fully abolish custom tariffs and quotas on most or all goods

15
Q

Export subsidies

A

a payment to encourage domestic production by lowering costs

15
Q

Import licensing

A

Government grants importers the right to import goods

16
Q

Strategic industries

A

an industry that the government considers to be important for the countries economy or safety

17
Q

Export dumping

A

when goods are exported for less than their normal value to destroy international competition

18
Q

Trade wars

A

a situation in which countries conflict with each other using protectionism

19
Q

Monetary union

A

A customs union\single market with a common currency

19
Q

Customs union

A

an FTA which features common external tariffs and quotas

20
Q

A single market

A

A customs union which features common policies on product regulation and freedom of movement of the FOP

21
Q

Full economic union

A

Complete free trade, a common external tariff, a single market, monetary union and also common fiscal and supply side policies

21
Q

Economic integration

A

the level of integration between economies

22
Q

Trade creation

A

the increase in economic welfare from joining a free trade area

22
Q

poverty

A

A situation in which individuals are unable to afford basic necessities

22
Q

Income

A

The flow of money into a household

23
Q

Trade diversion

A

when trade is diverted from a more efficient supply to a less efficient one due to an FTA or customs union

24
Q

Wealth

A

the stock of value of a households assets

25
Q

Absolute poverty

A

When a household has to survive on $2 a day or less

26
Q

Relative poverty

A

Households who earn 60% or less of the median income

27
Q

Lorenz curve

A

A curve which shows the cumulative distribution of income against population

28
Q

Brain drain

A

When a countries smartest individuals leave because there is better work available elsewhere

29
Q

Stagflation

A

High rate of inflation at the same time as high unemployment

30
Q

NRU

A

the natural rate of unemployment

31
Q

Phillips curve

A

A curve which establishes a link between inflation and unemployment

32
Q

Demand pull inflation

A

Inflation that is caused by a decrease in AD

33
Q

Cost push inflation

A

Inflation that is caused by an decrease in AS

34
Q

neo classical economics

A

A school of economics which believes that the market is self correcting

35
Q

neo classical Philips curve

A

similar to the Keynesian curve but believes that unemployment will always return to a fixed value

36
Q

Money illusion

A

When households think they have more money but their real wealth hasn’t changed

37
Q

Adaptive expectations

A

when the expectation changes over time

38
Q
A

econ (for realz this time) (4 decks)

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