OCR AS Economics: F582: Macro: The National and International Economy Part 2

In the short run, an increase in real GDP, and in the long run, an increase in productive capacity, that is, in the maximum output that the economy can produce.

A situation where people are out of work but are willing and able to work

The people who are employed and unemployed that is, those who are economically active

People of working age who are neither employed nor unemployed

A sustained fall in the general price level

A record of money flows coming in and going out of a country

Responsive to change in market conditions

The percentage increase in the price level over a period of time

Economic growth that can continue over time and does not endanger future generations’ ability to expand productive capacity

The expected increase in potential output over time. It is a measure of how fast the economy can grow without generating inflation

A situation where those wanting and able to work can find employment at the going wage rate

When more money is leaving the country than entering it, as a result of sales of its exports, income and current transfers from abroad being less than imports and income and current transfers going abroad

Output measured in current prices and so not adjusted for inflation

Output per worker per hour

Economic activity that is not recorded or registered with the authorities in order to avoid paying tax or complying with regulations, or because the activity is illegal

The advantage of producing on large scale, in the form of lower long-run average cost

The percentage of the labour force who are out of work