Macroeconomics flashcards 0.0 / 5 ? EconomicsMacroeconomicsA2/A-levelNone Created by: regina0325Created on: 15-03-18 11:02 Calculation the 'real GDP' nominal GDP X pricelevel in base year/price level in current year 1 of 12 what does demand-side policies do? designed to affect the level of aggregate demand in the economy. 2 of 12 control of the money supply, what is the purpose of money? 1. Medium of exchange 2. Store of wealth 3. Unit of account 3 of 12 what are the 3 elements of money? 1. Notes+ coins (2%) 2. Deposits in bank accounts (85%) 3. Reserves of commercial banks in the central banks (13%) 4 of 12 what are the 3 elements of monetary policy? 1. Control of money supply 2. control of the exchange rate 3. control of interest rates 5 of 12 What does the word 'inflation' mean? And what is the inflation target? Inflation is the increasing in general price level over a period of time. (2%+-1%) 6 of 12 What does progress tax system mean? As income increases, the % of income tax also increase. 7 of 12 If a country wants to increase exports, they must keep the exchange rate low,how do they do it? One way that China does, is to print new money and sell into the forex markets. 8 of 12 What does 'hot money' mean? money looking for a return. 9 of 12 what does 'exchange rate' mean? The exchange rate is the price of a currency in terms of another currency. 10 of 12 what is the calculation of money multiplier? 1/reserve ratio 11 of 12 what does the demand-side policies do? designed to affect the level of aggregate demand in the economy. 12 of 12
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