Theme 2 key terms

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  • Created by: tul
  • Created on: 29-03-16 09:58
Actual economic growth
The rate of growth of GDP in a period
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Aggregate demand
The total amount of spending on goods and services produced in an economy during a period of time
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Aggregate demand (AD) curve
The relationship between the level of aggregate demand and the overall price level; it shows planned expenditure at any given possible overall price level
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Bank rate
The interest rate that is set by the Monetary Policy Committee of the Bank of England in order to influence inflation
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Average propensity to consume
The proportion of income that households devote to consuption
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Crowding out
A process by which an increase in government expenditure crowds out private sector activity by raising the cost of borrowing
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Demand-pull inflation
Inflation initiated by an increase in aggregate demand
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Index number
A device for comparing the value of a variable in one period or location with a base observation (e.g. the consumer price index measures the average level of prices relative to a base period)
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Disinflaton
A fall in the rate of inflation
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Wealth
A stock concept- the accumulation of assets- either in employment or unemployed
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Stagflation
A situation describing an economy in which both unemployment and inflation are high at the same time
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Marginal propensity to save (MPS)
The proportion of an increase in disposable income that households would devote to saving
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Productivity
A measure of the efficiency of a factor of production
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Nominal value
The value of an economic variable based on current prices, taking no account of changing prices through time
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Other cards in this set

Card 2

Front

Aggregate demand

Back

The total amount of spending on goods and services produced in an economy during a period of time

Card 3

Front

Aggregate demand (AD) curve

Back

Preview of the front of card 3

Card 4

Front

Bank rate

Back

Preview of the front of card 4

Card 5

Front

Average propensity to consume

Back

Preview of the front of card 5
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