OCR AS Economics: F582: Macro: The National and International Economy Part 1
Definition cards from Bamford textbook for the Macroeconomics paper (OCR F582), definitions taken from Chapter 4: Aggregate demand and aggregate supply and their interaction. Part 1 of 3 sets of revision cards covering the whole paper.
- Created by: Josie
- Created on: 04-02-11 19:05
Aggregate demand
Aggregate demand
The total demand for a country's goods and services at a given price level and in a given time period
Price level
Price level
The average of each of the prices of all the products produced in an economy
Consumer expenditure
Consumer expenditure
Spending by households on consumer products
Investment
Investment
Spending on capital goods
Government spending
Government spending
Spending by the central government and local government on goods and services
Exports
Exports
Products sold abroad
Imports
Imports
Products bought from abroad
Net exports
Net exports
The value of exports minus the value of imports
Transfer payments
Transfer payments
Money transferred from one person or group to another not in return for any good or service
Job seeker's allowance
Job seeker's allowance
A benefit paid by the government to those unemployed and trying to find a job
Trade surplus
Trade surplus
The value of exports exceeding the value of imports
Trade deficit
Trade deficit
The value of imports exceeding the value of exports
Consumer condidence
Consumer confidence
How optimistic consumers are about future econonomic prospects
Rate of interest
Rate of interest
The charge for borrowing money and the amont paid for lending money
Average prospensity to consume (APC)
Average prospensity to consume (APC)
The proportion of disposable income spent. It is consumer expenditure divided by disposable income
Net savers
Net savers
People who save more than they borrow
Wealth
Wealth
A stock of assets, e.g. property, shares and money held in a savings account
Distribution of income
Distribution of income
How income is shared out between households in a country
Inflation
Inflation
A sustained rise in the price level
Saving
Saving
Real disposable income minus spending
Average prospensity to save (APS)
Average prospensity to save (APS)
The proportion of disposable income saved. It is saving divided by disposable income.
Target savers
Target savers
People who save with a target figure in mind
Dissave
Dissave
Spending more than disposable income
Savings ratio
Savings ratio
Savings as a proportion of disposable income
Capacity utilisation
Capacity utilisation
The extent to which firms are using their capital goods
Corporation tax
Corporation tax
A tax on firms profits
Retained profits
Retained profits
Profit kept by firms to finance investment
Unit cost
Unit cost
Average cost per unit of output
Real GDP
Real GDP
The country's output measured in constant prices and so adjusted for inflation
Gross domestic product (GDP)
Gross domestic product (GDP)
The total output of goods and services produced in a country
Exchange rate
Exchange rate
The price of one currency in terms of another
Tariff
Tariff
A tax on imports
Government bond
Government bond
A financial asset issued by the central or local government as a means of borrowing money
Aggregate supply
Aggregate supply
The total amount that produces in an economy are willing and able to supply at a given price level in a given time period
Productivity
Productivity
Output, or production, of a good or service per worker per unit of a factor of production in a given time period
Privatisation
Transfer of assets from the public to the private sector
Macroeconomic equilibrium
Macroeconomic equilibrium
A situation where aggregate demand equals aggregate supply and real GDP is not changing
Circular flow of income
Circular flow of income
The movement of spending and income throughout the economy
Factor services
Factor services
The services provided by the factors of production
Leakages
Leakages
Withdrawals of possible spending from the circular flow of income
Injections
Injections
Additions of extra spending into the circular flow of income
Multiplier effect
Multiplier effect
The process by which any change in a component of aggregate demand results in a greater final change in real GDP
Overheating
Overheating
The growth in aggregate demand outstripping the growth in aggregate supply, resulting in inflation
Output gap
Output gap
The difference between an economy's actual and potential real GDP
Trend growth
Trend growth
The expected increase in potential output over time
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