Economics Key Terms (Macro)
- Created by: Dominic Lawson
- Created on: 15-05-13 17:58
Aggregate Demand- total demand in the economy
Aggregate Supply- total value of goods and services supplied in the economy
Economic Growth- the capacity for the economy to create more goods and services over time
GDP- total value of goods and services produced in the economy
Negative Output Gap- when an economy is producing less than its trend output
Positive Output Gap- when actual GDP exceeds trend GDP increasing inflationary pressure
Trade-off- where one macro-economic objective has to be given up in favour of another objective
Employment- where labour is actively engaged in, in echange for payments
Unemployment- those without a job but who are seeking work at current wage rates
Nominal GDP- not adjusted for inflation
Real GDP- figures adjusted for inflation
GDP per capita- GDP divided by population (measure of living standards)
Index Numbers- a weighted average of a group of items compared to a given base value of 100
Recession- when an economy is growing at less than its long-term rate of growth for more than two quarters
Balance of payments- exports minus imports (deficit = I > E)
Injections- money that originates outside the circular flow and so will increase national income/output/expenditure
Withdrawals- any money not passed on in the circular flow and has the effect of reducing national income/output/expenditure
Investment- spending by firms on building machinery and improving…
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