CHAPTER 11

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Economic Growth?
An increase in the real output of the economy
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Long term growth rate?
The average rate of economic growth sustained over a period of time
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Real GDP Per Capita?
The total output of the economy in a year, divided by the size of the population, adjusted for inflation
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Actual Growth?
An increase in the production potential of the economy matched by an increase in demand
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Potential Growth?
An increase in the productive potential of the economy, not necessarily matched by demand
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Output Gap?
The difference between the actual level of GDP and the productive potential of the economy
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GDP?
Output produced by resources within the UK
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GNP?
Gross National Product - Output produced by resources within the UK, plus net property income from abroad
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National Income?
Output produced by resources within the UK, plus net property income from abroad, minus depreciation of the nation's capital equipment
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Purchasing Power Parity?
Exchange rates that take into account how much a typical basket of goods in one country costs compared to another country
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Human Development Index?
Measure of economic welfare based in the average of 3 indicators: Standard of living, life expectancy and educational attainment
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Human Poverty Index?
Measure of economic welfare based on 4 basic dimensions of human life: Longevity, knowledge, economic provisioning and social inclusion
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Measure of Domestic Progress?
Measure of economic welfare designed to reflect progress in quality of life and progress towards a sustainable economy by factoringin social and environmental costs of growth, and benefits of unpaid work like household labour
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Misery Index?
Measure of economic welface constructed by adding the unemployment rate to the inflation rate
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Sustainability (of economic growth) ?
Economic growth which doesnt impose costs on future generations
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Balance of Payments?
Record of the financial transactions over a period of time between a country and its trading partners
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Inventory Investment/Stock-building?
Investment by firms in stocks of raw materials and stocks of finished goods ready to be sold
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Accelerator Theory?
Theory that the level of investment is related to past changes in national income
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Multiplier Effect?
A change in one of the components of aggregate demand leads to a greater overall change in national income
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Other cards in this set

Card 2

Front

Long term growth rate?

Back

The average rate of economic growth sustained over a period of time

Card 3

Front

Real GDP Per Capita?

Back

Preview of the front of card 3

Card 4

Front

Actual Growth?

Back

Preview of the front of card 4

Card 5

Front

Potential Growth?

Back

Preview of the front of card 5
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