Welvaart (1e druk) - Economics Flashcards

Vocabulary practice flashcards covering GDP measurement, supply-side potential, macroeconomic aggregate demand, labor market dynamics, and broad welfare concepts from the Welvaart (1e druk) LWEO economics study notes.

Primary Income (Primair inkomen)

Income received as compensation for providing factors of production, consisting of wages and the profit of the self-employed (for labor) as well as dividends, rent, lease/ground rent, and interest (for capital).

Value Added (Toegevoegde waarde)

The gross value created by a firm during production, calculated as sales revenue minus intermediate consumption of purchased goods and services, which equals the sum of factor rewards (wages, interest, rent, profit) plus depreciation.

Labor Income Share (Arbeidsinkomensquote / AIQ)

The proportion of total national income earned as labor income (wages plus an imputed wage portion of self-employed profit), expressed as $\text{AIQ} = \frac{\text{Labor Income}}{\text{National Income}} \times 100\%$.

Capital Income Share (Kapitaalinkomensquote / KIQ)

The proportion of total national income earned as capital income (profits, interest, rent, and lease payments), expressed as $\text{KIQ} = \frac{\text{Capital Income}}{\text{National Income}} \times 100\%$.

80/20 Ratio

An income inequality measure calculated by dividing the total income share of the highest income quintile ($20\%$) by the total income share of the lowest income quintile ($20\%$); a declining ratio indicates income leveling (nivellering).

Total Factor Productivity (Totale factorproductiviteit / TFP)

A measure of economic efficiency and technological progress that explains output growth beyond the contribution of additional labor and capital inputs in the production function.

Law of Diminishing Marginal Returns (Afnemende meeropbrengsten)

The economic principle stating that as successive units of a variable factor (such as capital or labor) are added to a fixed factor, each additional unit yields progressively smaller additions to total output ($\Delta Y$).

Human Capital (Menselijk kapitaal)

The stock of knowledge, competencies, and education embodied in workers that enhances labor productivity and facilitates process and product innovations.

Structural Policy (Structuurbeleid)

Government policy aimed at strengthening the long-term productive capacity and supply side of the economy by improving infrastructure, education, and institutional stability.

National Savings Balance (Nationaal spaarsaldo)

The combined net financial balance of the private sector and the government, calculated as $(S - I) + (B - O)$, which identically equals the balance on the current account $(E - M)$.

Macroeconomic Income Identity

The national accounting identity where aggregate spending $Y = C + I + O + E - M$ equals total generated national income allocated among uses $Y = C + B + S$.

Anticyclical Fiscal Policy (Anticyclisch begrotingsbeleid)

Government intervention that counters the business cycle by raising spending and lowering taxes during a downturn (laagconjunctuur), and curbing spending and raising taxes during a boom (hoogconjunctuur).

Keynesian Business Cycle Theory (Keynesiaanse visie)

A macroeconomic view asserting that business cycle fluctuations are driven by effective demand, meaning unemployment and inflation move inversely rather than rising or falling at the same time.

Cyclical Unemployment (Conjuncturele werkloosheid)

Unemployment that occurs when aggregate effective demand in the economy is insufficient to fully utilize existing production capacity.

Wage Moderation (Loonmatiging)

The practice of keeping nominal wage increases below or close to productivity growth to reduce unit labor costs, improve international competitiveness, and support employment.

Unit Labor Costs (Loonkosten per eenheid product)

The average labor expense incurred to produce one single unit of output, defined as hourly labor costs divided by hourly labor productivity.

Hold-Up Problem (Berovingsprobleem)

A market failure where employers underinvest in the training of temporary/flexible workers because they fear the worker will leave, preventing the firm from recouping its sunk investment costs.

Tight Labor Market (Krappe arbeidsmarkt)

A labor market state where the number of vacancies is high relative to the number of unemployed job seekers, forcing employers to raise wages to attract staff.

Broad Welfare (Brede welvaart)

An overarching assessment of prosperity that encompasses not only material consumption and GDP per capita, but also well-being dimensions such as health, education, environment, safety, and work-life balance.

Green GDP (Groen bbp)

An ecological adjustment to gross domestic product that subtracts the monetary value of environmental degradation, resource depletion, and unpaid damage costs (such as $CO_2$ emissions).

Free Goods (Vrije goederen)

Goods and values (such as clean natural air or social relationships) that do not require the input of scarce factors of production and are categorized under subjective well-being rather than conventional economic production.