Economics F582

Economics Flash Cards F582

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  • Created by: ajayc
  • Created on: 26-05-10 07:55

Net Savers

People who save more than they borrow

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Fiscal Policy

The taxation and spending decisions of the government

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Retail Price Index

A measure of inflation used for adjusting pensions

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International Monetary Fund (IMF)

It helps to coordinate the international monetary system

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World Trade Organisation (WTO)

Promotes free trade and rules on international trade disputes

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Real Interest Rates

The nominal interest rate minus the inflation rate

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Monetary Policy Committee

A committee of the Bank Of England that sets the interest rate in order to meet the governments inflation target

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Consumer Price Index (CPI)

A measure of inflation based of consumer goods and services

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Sustainable economic growth

growth that can be sustained over time and does not endanger future generations ability to expand productive compacity

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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

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The growth in AD outstripping the growth in AS resulting in inflation

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Output Gap

The difference between an economy's actual and potential output

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Multiplier Effect

Process by which any change in a component of AD results in a greater final change in real GDP

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Circular Flow of Income

The movement of spending and income throughout the economy

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Macroeconomic Equilibrium

A situation where AD equals AS and real GDP is not changing

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output, or production of goods or services per worker per unit of a factor of production in a given time period

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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

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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

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Government Spending

Spending by both central and local government on goods and services

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spending on capital goods

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Total amount of goods and services produced in a country

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Net Exports

The value of exports minus the value of imports

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Real GDP

The countries output measured in constant prices and so adjusted for inflation

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Price Level

The average of each or the prices of all the products produced in the economy

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Aggregate Demand

The total demand for a countries goods and services at a given price level and in a given time period

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Monetary Policy

Decisions on:

The rate of interest

The supply of money

the exchange rate

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Savings Ratio

Savings as a proportion of disposable income

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Automatic Stabilisers

Forms of government spending and taxation that change automatically to offset fluctuations in economic activity

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