8187599
Description
Flashcards by Christel Dickson, updated more than 1 year ago
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Created by Christel Dickson
over 7 years ago
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| Question | Answer |
| What are government's 4 main economic objectives ? | - Low Inflation - Low unemployment - Economic Growth - Healthy balance of payments between imports and exports |
| What's a positive balance of payments? | This is when the value of exports in a country is greater than the value of imports |
| What's inflation? | This is the increase in the average price level of goods and services overtime. |
| Give 3 advantages of low inflation and 3 disadvantages of high inflation | Advantages - Standard of living increases - It's easier for companies to expand and set up new ventures - A rise in real income Disadvantages - Reduction in purchasing power - Minimal job creation - Increase in the purchase of cheaper foreign goods |
| What is real income? | Real income is the value in terms of what can be bought of an income |
| What's a level of unemployment? | The proportion or percentage of the population that are capable of working but are unable to find a job |
| Give 2 effects of unemployment | - The total level of output in the country will be lower than it could be -A high level of unemployment will cost the government a great deal of money. (unemployment benefits) |
| How will low unemployment benefit a country and its people? | It will help increase the country's output and improve workers living standards |
| What's Gross Domestic Product (GDP)? | This is the total value of output of goods and services in a country in one year. |
| What's economic growth? | This is when a country's Gross Domestic Product increases. |
| Give 3 problems caused by a decline in economic growth? | - As output falls, fewer workers are needed and unemployment will occur? -The average standard of living will drop - Businesses are unlikely to expand |
| What are the 4 main stages of the trade or business cycle? | - Growth - Boom - Recession -Slump |
| Give 3 characteristics of growth | -GDP is rising - unemployment is generally falling -Living Standards are improving |
| Give 3 characteristics of boom | - Prices rise quickly - There is a shortage of skilled workers - Business costs rise |
| List 3 characteristics of recession | - Too little spending -GDP falls -Falling demands and profits for businesses |
| List 3 characteristics of slump | - High unemployment - Prices may fall - Low level of business survival |
| What's recession? | It's a period of falling GDP |
| What's the difference between exports and imports? | Exports are goods and services sold from one country to other countries while imports are goods and services bought in by one country from other countries |
| State some problems caused by having a balance of payments deficit | - The country may experience exchange rate depriciation -The country may run out of foreign currencies and may have to borrow |
| What's an exchange rate depreciation? | This is a fall in the value of a currency compared with other currencies. |
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