Definitions for unit 2 economics

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Nominal GDP
the total value of goods and services produced within an economy in a given period of time
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Real GDP
Nominal GDP with inflation taken out
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Wealth
Total of all assets
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Economic growth
the positive percentage change over a given period of usually a year
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Real Disposable income
income when tax and inflation has been taken into account
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Aggregate Demand(AD)
the total demand for goods and services in an economy that the consumers are willing and able to purchase
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Aggregate supply (AS)
the total supply of goods and services in an economy that the producers are willing and able to produce
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Fiscal Policy
The government use of taxation to influence macroeconomic variables
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Monetary Policy
The use of interest rates, money supply and exchange rates to influence macroeconomics.
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Consumption
Current spending on goods and services in an economy
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Investment
The spending figures by firms to increase productive capacity
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savings ratio
proportion of income that is saved
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equilibrium level of income (output)
price at which demand and supply are equal
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circular flow of income
a simplified representation showing how firms and households interact. It links the demand for goods, services , production demand for factors and income
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the multipler
any chnage on aggregate demand has a proportionally larger effect on national output
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macroeconomic objectives
sustainable economic growth, low and stable inflation, low unemployment, balance of payments equilbrum
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Balance of payments
a record of value of exports of goods and services set against the value of imported goods and services rate at which one currency can be exchange for another
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current account surplus
in the balance of payments when the value of goods and services exported from an economy is more that the value of the imports
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current account deficit
in the balance of payments when the value of goods and services exported from an economy is less than the value of the imports
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Retail Price Index (RPI)
an index of price changes that includes expenditure of owner occupied housing costs
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RPIX
an index of price changes that does not includes expenditure of owner occupied housing costs
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Cost-push inflation
an increase in price levels attributes to increase in costs of the production
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Demand-pull inflation
rising price levels attribute to excess demand in the economy
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Claimant Count unemployment
a measure of unemployment sing records of those formally recognized as receiving unemployment benefits.
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Interest Rates
The costs of borrowing. the benefit of lending or depositing money usually expressed as a percentage
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Other cards in this set

Card 2

Front

Nominal GDP with inflation taken out

Back

Real GDP

Card 3

Front

Total of all assets

Back

Preview of the back of card 3

Card 4

Front

the positive percentage change over a given period of usually a year

Back

Preview of the back of card 4

Card 5

Front

income when tax and inflation has been taken into account

Back

Preview of the back of card 5
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