Pre-DP definitions 2

money

anything that serves as a medium of exchange, a unit of account, and a store of value

interest rate

Percentage paid to a lender for the use of borrowed money (in debt); percentage earned on invested principal (in investing)

economic growth

an increase in the amount of goods and services produced per head of the population over a period of time.

GDP

the total market value of all final goods and services produced annually in an economy

Recession

a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Inflation

a general increase in prices and fall in the purchasing value of money.

unemployment

the number of people who are actively looking for work but aren't currently employed

distribution of income

way in which the nation's income is divided among families, individuals, or other designated groups; difference between the rich and poor

international trade

the exchange of goods and services among nations

fiscal policy

the use of government spending and revenue collection to influence the economy

monetary policy

the setting of the money supply by policymakers in the central bank

progressive tax

A tax graduated so that people with higher incomes pay larger fraction of their income than people with lower incomes.

Imports

goods produced abroad and sold domestically

Exports

goods produced domestically and sold abroad

Globalisation

The increasing integration of economies and societies around the world particularly through international trade

Aggregate Demand (AD)

the amount of goods and services in the economy that will be purchased at all possible price levels

Aggregate Supply (AS)

the total amount of goods and services in the economy available at all possible price levels

macroeconomy

the economy as a whole; a whole country

Consumer Price Index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer

extreme poverty

living on less than $1.25 a day or $400 a year

government budget deficit

the excess of government spending over tax collections (G-T)

government budget surplus

the excess of government tax collections over government spending (T-G); the government budget surplus equals public saving

national debt

The sum of government deficits over time.

central bank

an institution designed to oversee the banking system and regulate the quantity of money in the economy

Proportional taxation

The tax as a percentage of income remains constant as income increases; also called a flat tax

current account

in the balance of payments, records transactions involving the export or import of goods, services, income and transfers

Current account deficit

The current account of the balance of payments is in deficit when a country imports more goods and services than it exports.

current account surplus

The current account of the balance of payments is in surplus when a country exports more goods and services than it imports.

depreciation of currency

a fall in the price of one currency relative to another

appreciation of currency

a rise in the price of one currency relative to another