The allocation of scarce resources to provide for the unlimited human wants
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Macroeconomics
The study of the economy as a whole, including inflation, growth and unemployment
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Depression
A period when there is a particularly deep and long fall in output
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Recession
A period when growth in output falls or becomes negative. A recession occurs when growth in output is negative for two successive quarters ( 6 months )
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Closed economy
An economy where there is no foreign trade.
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Open economy
An economy where there is trade with other countries .
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National income
The value of the output, expenditure or income of an economy over a period of time.
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Transfer payments
Income for which there is no corresponding output, such as unemployment benefits or pension payments.
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Withdrawals/leakages
In the circular flow of income, spending by households which does not floe back to domestic firms. It includes savings, taxes and imports.
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Boom
A period if time when the economy is growing strongly and is operating around its productive potential.
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Economic growth
An increase in a country's national income.
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Economic recovery
The movement back from where the economy is operating below its productive potential to a point where it is at its productive potential.
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Output gap
The difference between the actual level of GDP and the productive potential of the economy.
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Positive output gap
When actual GDP is above the productive potential of the economy and it is in boom.
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Negative output gap
When actual GDP is below the productive potential of the economy.
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Other cards in this set
Card 2
Front
The study of the economy as a whole, including inflation, growth and unemployment
Back
Macroeconomics
Card 3
Front
A period when there is a particularly deep and long fall in output
Back
Card 4
Front
A period when growth in output falls or becomes negative. A recession occurs when growth in output is negative for two successive quarters ( 6 months )
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