Economics F582
Economics Flash Cards F582
- Created by: ajayc
- Created on: 26-05-10 07:55
Net Savers
People who save more than they borrow
Fiscal Policy
The taxation and spending decisions of the government
Retail Price Index
A measure of inflation used for adjusting pensions
International Monetary Fund (IMF)
It helps to coordinate the international monetary system
World Trade Organisation (WTO)
Promotes free trade and rules on international trade disputes
Real Interest Rates
The nominal interest rate minus the inflation rate
Monetary Policy Committee
A committee of the Bank Of England that sets the interest rate in order to meet the governments inflation target
Consumer Price Index (CPI)
A measure of inflation based of consumer goods and services
Sustainable economic growth
growth that can be sustained over time and does not endanger future generations ability to expand productive compacity
Economic Growth
Short Run - increase in Real GDP
Long Run - increase in productive capacity that is in the maximum output that an economy can produce
Overheating
The growth in AD outstripping the growth in AS resulting in inflation
Output Gap
The difference between an economy's actual and potential output
Multiplier Effect
Process by which any change in a component of AD results in a greater final change in real GDP
Circular Flow of Income
The movement of spending and income throughout the economy
Macroeconomic Equilibrium
A situation where AD equals AS and real GDP is not changing
Productivity
output, or production of goods or services per worker per unit of a factor of production in a given time period
Aggregate Supply
The total amount that producers in an economy are willing and able to supply at a given price level in a given time
Transfer Payments
Money transferred from one person or group to another, not in return for any goods or services.
e.g job seekers allowance state pensions
Government Spending
Spending by both central and local government on goods and services
investment
spending on capital goods
GDP
Total amount of goods and services produced in a country
Net Exports
The value of exports minus the value of imports
Real GDP
The countries output measured in constant prices and so adjusted for inflation
Price Level
The average of each or the prices of all the products produced in the economy
Aggregate Demand
The total demand for a countries goods and services at a given price level and in a given time period
Monetary Policy
Decisions on:
The rate of interest
The supply of money
the exchange rate
Savings Ratio
Savings as a proportion of disposable income
Automatic Stabilisers
Forms of government spending and taxation that change automatically to offset fluctuations in economic activity
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