This is the growth of real output resulting from using idle resources, such as labour, thereby taking up the slack in the economy
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Long-run economic growth
This is an increase in an economy;s potential level of real output and an outward shift in the economy's production possibility frontier
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Gross Domestic Product (GDP)
This is the sum of all goods and services produced in an economy over a period of time e.g. a year
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Real GDP
This is a measure of all goods and services produced in an economy adjusted for price changes or inflation
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Nominal GDP
This is GDP measured without removing the effects of inflation
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Recession
This is a fall in real GDP for 6 months or more
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Full employment
This is when 3% of less of the labour force is unemployed
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Inflation
This is a persistent or continuing rise in the average price level
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Deflation
This is a persistent or continuing fall in the average price level
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Disinflation
This is when the rate of inflation is falling but it is still positive
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Price Index
This is an index number than shows the extent to which a price has changed over a period of time in comparison to the prices in a base year
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Consumer Price Index
This is a measure used to calculate the rate of consumer price inflation in the UK
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Balance of Payments
This is a record of the currency flows in and out of a country in a particular time period
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Current Account of the balance of payments
This measures all the currency flows in and out of a country in a particular time period in payment for exports and imports, coupled with income and transfer flows
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Exports
These are domestically produced goods or services sold to residents of other countries
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Imports
These are goods or services produced in other countries and sold to residents of this country
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Balance of trade
This is the difference between the money value of a country's imports and its exports
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Balance of trade deficit
This occurs when the money value of a country's imports exceed the money value of its exports
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Balance of trade surplus
This occurs when the money value of a country's exports exceeds the money value of its imports
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Balanced Budget
This is when government spending equals government tax revenue
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Budget deficit
This occurs when government spending is greater than government revenue
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Policy conflict
This occurs when two policy objectives cannot be achieved at the same time
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Keynesian economists
They are followers of the economist John Maynard Keynes who believed that the economy should be managed through the use of fiscal policy
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Monetary policy
This is the use of interest rates and other monetary instruments to try and achieve the government's policy objectives
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Fiscal Policy
This is the use of government spending and taxation to try to achieve the government's policy objectives
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Other cards in this set
Card 2
Front
This is an increase in an economy;s potential level of real output and an outward shift in the economy's production possibility frontier
Back
Long-run economic growth
Card 3
Front
This is the sum of all goods and services produced in an economy over a period of time e.g. a year
Back
Card 4
Front
This is a measure of all goods and services produced in an economy adjusted for price changes or inflation
Back
Card 5
Front
This is GDP measured without removing the effects of inflation
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