MACRO definitions

?
Aggregate demand (AD)
is the total demand for good and services produced in an ecomomy ata given price level and in a given time period.
1 of 99
Price level
the average of each of the prices of all the products produced in an economy.
2 of 99
Consumer expenditure
spending by households on consumer products
3 of 99
Investment
Spending on capital goods
4 of 99
Government spending
Spending by the central government and local government on goods and serivices
5 of 99
exports
products sold abroad
6 of 99
imports
probuscts bought from abroad
7 of 99
net exports
the value of exports minus the value of imports
8 of 99
transfer payments
money transferred from one person or group to another not in return for any good of service
9 of 99
job seeker's allowance
a benefit paid by the government to those unemployed and trying to find a job
10 of 99
trade surplus
the value of exports exceeding the value of imports
11 of 99
trade deficit
the value of imports exceeding the value of exports
12 of 99
consumer confidence
How optimistic consumers are about the future economic prospects
13 of 99
rate of interest
the charge for borrowing money and the amount for lending money
14 of 99
Average propensity to consume (APC)
the proportion of disposable income spent. It is consumer expenditure divived by disposible income.
15 of 99
Net saver
people who save more than the borrow
16 of 99
wealth
a stock of assets, e.g property, shares and money held in savings account.
17 of 99
Distribution of income
how income is shared out between households in a country
18 of 99
inflation
a sustained rise in the price level
19 of 99
saving
real disposible income minus spending
20 of 99
Average propensity to save (APS)
the proportion of disposable income saved. It is saving divided by disposible income
21 of 99
Target savers
people who save with a target figure in mind
22 of 99
Dissave
spending more that disposible income
23 of 99
savings ratio
savings as a proportiong of disposible income
24 of 99
Capacity utillisation
the extent to which firms are using their capital goods
25 of 99
Corporation tax
a tax on the firms profits
26 of 99
Retained profits
Profit kept by firms to finance investment
27 of 99
unit cost
average cost of output
28 of 99
real GDP
the country,s output measured in constant prices and so adjusted for inflation
29 of 99
Gross Demestic Product (GDP)
the total output of goods and services in a country
30 of 99
exchange rate
the price of one currency in terms of another currency
31 of 99
Tariff
a tax on imports
32 of 99
Government bond
a finacial asset issued by the central or local government as a means of borrowing money
33 of 99
Aggregate supply
the total amount that producers in an ecomnomy are willing and able to supply at a given price level in a given time period
34 of 99
Productivity
output, or production, of a good or serivce per worker per unit of a factor of production in a given time period
35 of 99
Privatisation
transfer of assets from the public to the private sector
36 of 99
Macroeconomic equilibrium
a situation where aggregate demand equals aggregate supply and real GDP is not changing
37 of 99
Circular flow of income
the movement of spending and income throughout the economy
38 of 99
Factor services
the services provided by the factors of production
39 of 99
Leakages
withdrawals of possible spending from the circular flow of income
40 of 99
injections
Additions of extra spending into the circular flow of income
41 of 99
Multiplier effect
the progress by which any change in a componant of aggregate demand results in a greater final change in real GDP
42 of 99
Overheating
the growth in aggregate demand outstripping the growth in aggregate supply, resuling in inflation
43 of 99
Output gap
the difference between an economy's actual and potential real GDP
44 of 99
Trend growth
The expected increase in potential output over time
45 of 99
economic growth
in the short run, an increase in real GDP, and in the long run, an increase in productive capacity, that is, in the maximum output that the economy can produce
46 of 99
Unemployment
a situation where people are out of work but willing and able to work
47 of 99
labour force
The people who are employed and unemployed, that is, those who are economically active.
48 of 99
Economically inactive
people of working age who are neither employed nor umemployed
49 of 99
deflation
a sustained decrease in the general price level
50 of 99
balance of payments
a reconrd of money flows coming in and going out of a country
51 of 99
elastic
responsiveness to a change in the market conditions
52 of 99
inflations rate
the percentage increse in the price level over a period of time
53 of 99
Susainable economic growth
economic growth that can continue over time and does not endanger future generatioins' ability to expand productive capacity
54 of 99
trend growth
the expected increase in the potential output over time. It is a measure of how fast the economy can grow without generating inflation
55 of 99
Full employment
A situation where those wanting and able to work can find work at the going wage rate.
56 of 99
current account deficit
when more money is leaving the country than entering it, as a result of sales of its exports, income and current transfers from abroad being less than imports and income and current transfers going abroard
57 of 99
Hyperinflation
an inflation rate above 50 percent
58 of 99
Nominal GDP
output measured in current prices and so not adjusted for inflation
59 of 99
Labour productivity
output per worker
60 of 99
Informal economy
economic activity that is not recorded or regestered with the authorities in order to avoid paying tax or complying with regulations, or because activity is illegal
61 of 99
economy of scale
the advantage of producing on large scale, in the form of lower long-run average costs
62 of 99
unemployment rate
the percentage of the labour force who are out of work
63 of 99
Labour force survey
a measure of umemployment based on a survey using the ILO definition of unemployment
64 of 99
International Labout Organisation (ILO)
a member organisation of the United Nations that collects statistics on labour market conditions and seeks to improve working conditions
65 of 99
Claimant count
a measur eof unemployment that includes those receiving unemployment-related benefits
66 of 99
Consumer prices index
a measurer of changes in the price of a representive basket of consumer goods and services. Differs from the retail price index (RPI) in methodology and coverage
67 of 99
Retail prices index (RPI)
measure of inflation that us used for adjusting pensions and other benefits to take account of changes in inflation and frequently used in wage negotiations. Differes from the consumer prices index (CPI) in methodology and coverage
68 of 99
Cyclical unemplayment
unemployment arising from a lack of Aggregate demand
69 of 99
Structural unemployment
unemplymetn caused by the decline of certain industries and occupations due to changes in demand and supply
70 of 99
Frictional unemploymetn
short term umemployment accouring when workers are in-between jobs
71 of 99
Demand pull inflation
increases in the price level caused by increases in aggregate demand
72 of 99
cost-push inflation
increases in the price level caused by increases in the cost of production
73 of 99
hysteresis
unemployment causing unemployment
74 of 99
long-term unemployment
unemployment lasting for more than a year
75 of 99
menue costs
the costs of changing prices due to inflation
76 of 99
shoeleather costs
costs in terms of the extra time and effort involved in reducing money holdings
77 of 99
inflationary noise
the distortion of price signals caused by inflation
78 of 99
real interest rat
the nominal interest rate minus the inflation rate
79 of 99
fiscal drag
people's income being dragged into higher tax bands as a result og tax brackets not being adjusted in line with inflation
80 of 99
International Monetary Fund (IMF)
an international organisation that helps co-ordinate the international monetary system
81 of 99
World Trade Organisation (WTO)
an international organisation that promotes free international trade and rules on international trade disputes
82 of 99
Exchange rate
the price of once currency in terms of another currency or currencies
83 of 99
Monetary Policy Commitee (MPC)
a comittee of the Bank of England with respocibility for setting the interest rate in order to meet the government's inflation target
84 of 99
Fiscal Policy
the taxation and spending decisions of a government
85 of 99
monetary policy
central bank and/or government decisions on the rate of interest, the money supply and the exchange rate
86 of 99
supply-side policies
policies designed to increase aggregate supply by imporving the effiency of labour and product markets
87 of 99
Reflectionary
of policy measures designed to increase aggregate demand
88 of 99
deflationary
of policy measures designed to reduce aggregate demand
89 of 99
discretionary fiscal policy
deliberate chages in government spending and taxation designed to influence aggregate demand
90 of 99
Economic cycle
the tendency for economic activity to fluctuate outside its trend growth rate, moving from a high level of economic activity (boom) to negative economic growth (recession)
91 of 99
Progressive tax
a tax that takes a higher percentage from the income of the rich
92 of 99
regressive tax
a tax that takes a greater percentage from the income of the poor
93 of 99
human capital
education, training and experience that a worker, or group of workers, possesses.
94 of 99
tariff
a tax on imports
95 of 99
quota
a limit on exports
96 of 99
Occupational immobility of labour
difficulty in moving from one type of job to another
97 of 99
Protectionism
the protection of domestic industries from foreign competition
98 of 99
Voluntary export restraint (VER)
a limit placed on import's from a country with the agrrement of that country's government.
99 of 99

Other cards in this set

Card 2

Front

the average of each of the prices of all the products produced in an economy.

Back

Price level

Card 3

Front

spending by households on consumer products

Back

Preview of the back of card 3

Card 4

Front

Spending on capital goods

Back

Preview of the back of card 4

Card 5

Front

Spending by the central government and local government on goods and serivices

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Macroeconomic indicators resources »