Economics Unit 2-Keywords

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Karteikarten am Economics Unit 2-Keywords, erstellt von Ami7991 am 14/05/2014.
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Zusammenfassung der Ressource

Frage Antworten
What is aggregate demand? What is aggregate supply? Aggregate Demand: total demand in the economy its components are C+I+G+(X-M) Aggregate Supply: total value of goods and services supplied in the economy
What is Economic Growth? What is GDP? Economic Growth: the capacity of t he economy to produce more goods and services overtime GDP: the total value of goods and services produced in the economy
What is a negative output gap? What is a positive output gap? Negative output gap: where the economy is producing less than its trend output Positive output gap: when actual GDP exceeds trend GDP increasing inflationary pressure
What is a Trade-off? Trade-off: where one macroeconomic objective has to be curtailed in favor of another objective
What are Imports? What are Exports? Imports: goods or services purchased from abroad Exports: goods or services sold abroad
What is meant by employment? What is meant by unemployment? Employment: where labour is actively engaged in a productive activity usually in exchange of payments Unemployment: those without a job but who are currently seeking work at current wage rates
Name the five types of unemployment? Cyclical unemployment Demand deficient unemployment Frictional unemployment Structural unemployment Voluntary unemployment
Cyclical unemployment: demand deficient unemployment that occurs as a result of the economic cycle Demand deficient unemployment: insufficient AD in the economy to employ labour Frictional unemployment: people between jobs Structural unemployment: unemployment caused by change in the demand side or supply side of the economy Voluntary unemployment: workers who are not prepared to take jobs at current wage levels
What are economic indicators? Economic indicators: economic statistics that provide information about the expansion and contraction of business cycles
What is the pattern that the economic cycle goes through? Boom, Recession, Slump and Recovery
What is a recession? What is balance of payments? Recession: when an economy is growing at less than its long-term trend rate of growth Balance of payments: exports minus imports- a deficit means more is imported than exported
What are injections? What are withdrawals? Name a type of withdrawal and a type of injection Injections: money that originates outside the circular flow and is added to it Withdrawals: any money not passed on in the circular flow and is taken out of it investment and Saving
Savings are income induced, what does this mean? What is a multiplier effect? Income induced: will increase as income increases and vice versa Multiplier effect: where and increase or decrease in spending leads to a larger than proportionate change in the national income
What is the accelerator effect? Accelerator effect: the relation between the change in new investment and the rate of change of national income
What is privatisation? What is a supply-side shock? Privatisation: sale of government owned assets to the private sector Supply-side shock: something that will increase or reduce the costs hence supply-side of all firms in the economy
What are the macroeconomic policy objectives? Full employment Economic growth Control of inflation Balance of payments
What are the macroeconomic policy instruments? Monetary policy Fiscal policy Supply-side policy
What is a boom/bust policy? What does total factor productivity mean? Boom/bust policy: the government using macroeconomic tools to stimulate then contract the economy Total factor productivity: the overall productivity of inputs used by a firm in producing a particular level of output
What is inflation? What is deflation? What is a credit crunch? Inflation: A persistent increase in the price level Deflation: A persistent decrease in the price level Credit crunch: where borrowing becomes more expensive or unavailable
What is the trend rate of growth in the UK? What is participation rate? UK trend rate : 2.5% Participation rate: proportion of the country's labour force
What is demand pull inflation? What is cost push inflation? Demand pull inflation: where AD exceeds AS leading to and increase in the price level Cost push inflation: where increased cost of production result in firms increasing their prices leading to a rise in the price level
What is meant by "Tight labour market"? Tight labour market: where firms have to increase wages to attract the labour they need
The current account is divided into 4 parts what are they? Trade in goods Trade in services Investment income Current transfers
What does Visibles and Invisibles mean in economics? Visibles: exports or imports that you can see and touch as they cross international boundaries Invisibles: intangibles such as the provision of insurance or banking services
What is deindustrialisation? What is globalization? Deindustrialisation: a fall in the proportion of N.O. accounted for by the manufacturing sector of the economy Globalization: the ability to produce goods anywhere in the world and sell them in any country
What happens when the current account is in equilibrium? When the current account is in equilibrium it does not affect the macroeconomy of the country
What is monetary policy? Monetary policy: controlling the macroeconomy via changes in monetary variables such as the money supply or interest rates
What is interest rate What is the transmission mechanism of monetary policy? Interest rate: the cost of borrowing the reward for saving Transmission mechanism of monetary policy: how changes in the base interest rate influence the components of AD
What do changes in interest rates impact? Housing market,Mortgage payers,Demand for credit,Consumer and Business confidence,Business investment, Exchange rate
What is meant by money supply? What are exchange rates? Money supply: the total amount of money in an economy Exchange rate: the price at which one currency exchanges for another
What is meant by Narrow money, Broad money and Hot money Narrow money:balances available for normal transactions Broad money:money that is not immediately accessible Hot money: money that is liable to rapid transfer from one country to another
What is fiscal policy? Fiscal policy: the policy of the government regarding taxation and government expenditure
What is current spending? What is capital spending? Current spending: government spending on a day to day basis Capital spending: government spending to improve productive capcity
What is a balanced budget, a budget deficit and a budget surplus? Balanced budget: receipts equal expenditure Budget deficit: expenditure exceed receipts Budget surplus: receipts exceed expenditure
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