Macro Economics Definitions .3 0.0 / 5 ? EconomicsEconomic PerformanceASAQA Created by: SophCreated on: 12-04-16 19:24 Economic Performance Success or failure in achieving economic policy objectives 1 of 23 Economic Recovery When short-run economic growth takes place after a recession 2 of 23 Demand-side This relates to the impact of changes in aggregate demand on the economy 3 of 23 Supply-side This related to changes in the potential output of the economy which is affected by the available factors of production 4 of 23 Trend growth rate This reflects the annual average percentage increase in the productive capacity of the economy 5 of 23 Seasonal fluctuation This is a variation of economic activity resulting from seasonal changes in the economy 6 of 23 Economic cycle This looks at upswing and downside in aggregate economic activity taking place over 4 to 12 years 7 of 23 Output gap This is the level of actual real output in the economy which is greater or lower than the trend output level 8 of 23 Positive output gap This is the level of actual real output in the economy which is greater than trend output level 9 of 23 Negative output gap This is the level of actual real output in the economy which is lower than the trend output level 10 of 23 Geographical immobility of labour This is when workers are unwilling or unable to move from one area to another in search of work 11 of 23 Occupational immobility of labour This is when workers are unwilling or unable to move from one type of job to another due to different skills needed 12 of 23 Frictional unemployment This is unemployment that is short term and occurs when workers switch between jobs 13 of 23 Structural unemployment This is long term unemployment caused by people lacking the skills required for a new job in a different industry 14 of 23 Cyclical/ Demand deficient unemployment This is unemployment caused by a lack of aggregate demand 15 of 23 Seasonal unemployment This occurs when unemployment rises due to factors such as weather 16 of 23 Real-wage unemployment This is unemployment caused by real wages being above the equilibrium wage. As a result, firms do not employ workers 17 of 23 Voluntary unemployment This is when workers choose to remain unemployed and refuse job offers at current wage rates 18 of 23 Demand pull inflation This is inflation caused by a rise in price level caused by an increase in aggregate demand thus shifting the curve to the right 19 of 23 Cost-push inflation This is a rise in price level caused by an increase in the costs of production which is shown by a shift in the SRAS cure to the left 20 of 23 Current account deficit This occurs when currency outflows exceed currency inflows. Exports are less than imports 21 of 23 Current account surplus This occurs when exports are greater than imports 22 of 23 Philips curve (SRAS) This is based on evidence which shows that when inflation is at its highest, unemployment is at its lowest 23 of 23
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