AS Macro Key Terms

Revision cards of key terms for Unit 2 aqa economics

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Aggregate Demand
C+I+G+(X-M). Total demand in the economy made up of consumption, investment, government spending, exports and imports.
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Aggregate Supply
Total value of goods and services supplied in the economy
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Economic Growth
The capacity of the economy to produce more goods and services over time.
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GDP
The total value of goods and services produced in an economy
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Negative Output Gap
Where an economy is producing less than its trend output
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Positive Output Gap
When real GDP exceeds trend GDP, increasing inflationary pressure
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Trade Off
When macroeconomic objectives conflict, and one has to be jeopardised to fulfil the other
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Imports
Goods/Services purchased from abroad
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Exports
Goods/services sold abroad
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Employment
Where labour is actively engaged in a productive activity usually in exchange for payment
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Unemployment
Members of the labour force who are without a job who are actively seeking work at current rates and are able to start work within 2 weeks
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Exporting
The sale of goods or services to a foreign country - generates income for home country
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Importing
The purchase of goods and services from abroad - expenditure for home country
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Economic indicators
Economic statistics which provide information about the expansions and contractions of the business cycle.
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Nominal GDP
GDP figure not adjusted for inflation
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Real GDP
figures for GDP adjusted for inflation
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GDP per capita
GDP divided by total population. Can be used to help determine standard of living in an economy
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Index numbers
A weighting average compared to a given base of 100
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Weighting
Where a commodity is given a weighting proportional to its importance in the general pattern of consumer spending.
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Economic Models
These are used to show the essential characteristics of complicated economic conditions in order to analyse them and predict the result of changes of variables
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Recession
When an economy has negative growth for two consequtive quarters
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Balance of Payments
Exports - Imports
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Injections
Money that comes into the circular flow of income.
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Withdrawal
Money taken out of the circular flow of income (e.g.savings)
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Capital Investment
Spending by firms on capital goods e.g. machinery
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Investment
The increase in the stock of capital during a given time period, or the purchase of goods that are used to produce other goods such as plant, machinery and buildings
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Saving
A withdrawal from the circular flow of income.
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Structural Unemployment
Unemployment that occurs when the demand for labour is less than the supply of labour in an individual labour market
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Cost-Push Inflation
An increase in the price level (or average price of goods and services) caused by a sustained increase in firms’ costs of production
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Disposable Income
Gross income less income tax and national insurance contributions plus cash welfare benefits
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Recovery
A phase of the economic cycle, after a recession/depression, during which real GDP starts to increase and unemployment begins to fall
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Supply-side Policies
Measures taken by the government (government policies) that are designed to increase the productive capacity/potential
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Productive Capacity
The amount of goods and services that the economy is capable of producing
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Budget Deficit
When government is spending more than it is receiving from taxes and other charges in a financial year
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Exchange Rate
The amount of the domestic currency needed to buy a given amount of foreign currency
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Other cards in this set

Card 2

Front

Aggregate Supply

Back

Total value of goods and services supplied in the economy

Card 3

Front

Economic Growth

Back

Preview of the front of card 3

Card 4

Front

GDP

Back

Preview of the front of card 4

Card 5

Front

Negative Output Gap

Back

Preview of the front of card 5
View more cards

Comments

izzy

Report

really useful!

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