macro eco
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18 Terms
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Calculating GDP growth
New-old/old x100
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Calculating GDP formula
C+I+G(X-M)
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Circular flow of income model
ressource market-firms-product market-consumers
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recession
point where the economy is decreasing
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boom
highest point in the economy
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recovery
economy slowly increases
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trough
lowest point in the economy
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advantages of GDP
shows size of economy
can show changes in economy
can show changes in economy
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disadvantages of GDP
black market doesn’t appear
doesn’t show quality of life
distribution of wealth not shown
doesn’t show quality of life
distribution of wealth not shown
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aggregate demand
total spending on goods
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aggregate supply
total amount of goods
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LRAS
long term aggregate supply
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SRAS
short term aggregate supply
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monetary policies
supply of money
interest rates
interest rates
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fiscal policy
government policies - spending and taxes
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inflation
general increase in price
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cost-push inflation
aggregate supply costs increase
prices increase - people have to pay more
prices increase - people have to pay more
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demand-pull inflation
aggregate demand is higher than aggregate supply
prices increase
prices increase
Note 
Flashcards (80)