An increase in country's productive potential measured by an increase in its real GDP
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Gross Domestic Product (GDP)
The total value of good and services produced in a country in one year - real GDP has been adjusted for inflation
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Business investments
Expenditure by businesses on capital equipment, new technology and research and development
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Business Cycle
A regular swings in economic activity, measured by GDP, that occur in most economy, varying of boom conditions (high demand and rapid growth) to recession when total national output declines
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Recession
A period of six months or more of declining real GDP
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Inflation
An increase in average price level of goods and services it results in a fall in value of money
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Deflation
A fall in the average price level of goods and services
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Working population
All those in the population of working age who are willing and are able to work
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Unemployment
This exists when number of working population are willing and able to work but are unable to find a job
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Cyclical unemployment
Unemployment resulting from low demands for goods and services in the economy during a period of slow economic growth or a recession
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Structural unemployemt
Unemployment caused by the decline in important industries, leading to significant job losses in one sector of industry
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Frictional unemployment
Unemployment resulting from workers losing or leaving jobs and taking a substantial period of time to find alternative employment
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Balance of payment (current account)
This account records the value of trade in goods and services between one country and the rest of the world.
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Deficit
A deficit means that the value of goods and services imported exceeds the value of goods and services exported
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Exchange rate depreciation
A fall in external value of a currency as measured by its exchange rate against other currencies.
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Exchange rate appreciation
A rise in the external value of a currency as measured by its exchange rate against other currencies.
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Fiscal policy
Concerned with decision about government expenditure, tax rates and government borrowing- these operate largely through the government's annual budget decisions
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Government budget deficit
The value of government spending exceeds revenue from taxation
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Government budget surplus
Taxation revenue revenue exceeds the value of government spending
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Monetary policy
Monetary policy is concerned with decision about the rate of interest and supply of money in the economy
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Market failure
When market fails to achieve most efficient allocation of resources and there is under - or overproduction of certain goods or services
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External cost
Costs of an economic activity that are not paid for by the producer or consumer, but by the rest of society
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Income elasticity of demand
Measures the responsiveness of demand for a product after a change in consumer incomes
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Other cards in this set
Card 2
Front
The total value of good and services produced in a country in one year - real GDP has been adjusted for inflation
Back
Gross Domestic Product (GDP)
Card 3
Front
Expenditure by businesses on capital equipment, new technology and research and development
Back
Card 4
Front
A regular swings in economic activity, measured by GDP, that occur in most economy, varying of boom conditions (high demand and rapid growth) to recession when total national output declines
Back
Card 5
Front
A period of six months or more of declining real GDP
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