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Aggregate The total planned spending on real output
demand produced within an economy.
Aggregate C+I+G+(x-m)
demand formula
Consumption The total planned spending by households
on real output produced within the
economy.
Investment The total planed spending by firms on real
output produced within the economy.
Interest rate The rewards for…

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GDP A measure of national income which
excludes net income from abroad; larger
than GNP in developing countries.
Purchasing Power The exchange rate of one currency in terms
Parity of another. The exchange rate that equates
the price of a basket of identical traded
goods and services in two countries.…

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Policy Objective A target or goal that policy makers aim to
achieve.
Policy Instrument A tool or set of tools which are used to try
and achieve the policy objective.
Policy indicator Provides information about what is
happening in the economy.
Central Bank The main bank in an economy that…

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Deregulation Removing previously imposed regulations
on businesses.
Marketisation Shifting provision of goods and services to
the market sector.
Privatisation The sale of government owned assets to
the private sector.
Trickle-down Income paid by the rich to the poorer
effect people they employ.
SIX examples of Incentives to work (income tax);…

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