Economics section C definitions

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Macroeconomics
The study of the economy as a whole.
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Macroeconomic adjectives
The aims of a government relating to key economic performance indicators such as economic growth, inflation and unemployment.
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Microeconomics
The study of individual parts of the economy.
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Economic growth
The increase in national income over time
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National income
The value of income, output or expenditure over a period of time.
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Gross Domestic Product (GDP)
The total value of all goods and services produced by an economy in a given year.
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Inflation
A general and persistent rise in prices
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Deflation
A persistent fall in average prices.
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Consumer price index (CPI)
A measure of the general price level (excluding housing costs)
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Retail price index (RPI)
A measure of the general price level which includes house prices and council tax.
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Aggregate demand
Total demand in the economy for goods and services including consumption, investment, government expenditure and exports minus imports.
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Aggregate supply
Total supply in the economy of goods and services. The total output of goods and services.
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Demand-pull inflation
Inflation caused by too much demand in the economy relative to supply.
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Cost-push inflation
Inflation caused by rising business costs
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Money supply inflation
Inflation caused by rapid growth in the money supply.
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Umemployment
When those actively seeking work are unable to find a job.
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Cyclical/demand deficient unemployment
Unemployment caused by falling demand as result of a downturn in the economic cycle.
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Frictional unemployment
When workers are unemployed for a short period of time as they move from one job to another.
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Seasonal unemployment
Unemployment caused when seasonal workers, such as those in the holiday industry, are laid off because the season has ended.
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ILO's definition of unemployment
Without a job, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks
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International trade
The exchange of goods and services over international borders.
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Exports
Goods and services sold overseas.
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Imports
Goods and services bought from overseas.
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Visible trade
Trade in physical goods (it can be seen).
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Invisible trade
Trade in services.
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Balance of payments
A record of all transactions relating to international trade. It is split into capital accounts and current accounts. It is used to record trade flows into and out of the country.
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Current account
A part of the balance of payments that looks at exports and imports.
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Capital account
A part of the balance of payments that looks at savings and investments.
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Current account defecit
More imports than exports. More money is being given to other countries than gained from other countries, so the current account loses money.
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Current account surplus
More exports than imports. More money is being gained from over countries than given to other countries, so the current account gains money.
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Exchange rate
The value of one currency in terms of another.
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Appreciation
When the value of the currency increases relative to another.
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Depreciation
When the value of the currency decreases relative to another
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Economic policy
The range of actions taken by the government to help achieve its economic objectives.
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Fiscal policy
Decisions about government spending, taxation and levels of borrowing which affect aggregate demand in the economy.
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Monetary policy
Decisions about interest rate that affect aggregate demand
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Interest rate
The rate of interest paid by borrowers for the use of money that they borrow from lenders.
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Base rate
The rate of interest set by the central bank
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Supply side policies
Government measures designed to increase AD in the economy.
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Other cards in this set

Card 2

Front

Macroeconomic adjectives

Back

The aims of a government relating to key economic performance indicators such as economic growth, inflation and unemployment.

Card 3

Front

Microeconomics

Back

Preview of the front of card 3

Card 4

Front

Economic growth

Back

Preview of the front of card 4

Card 5

Front

National income

Back

Preview of the front of card 5
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