Studied by 0 people
What are the main objective of macroeconomic policy?
Economic growth (increase GDP), price stability/ inflation, minimising unemployment and a stable balance of payments on current account.
What's the definition of economic activity?
Any behaviour or action that results in the supply or consumption of goods and services
What's the definition of gross domestic product?
What's GDP per capita?
What's real GDP?
GDP- the total value of goods and services (output) in an economy over a given period of time.
GDP per capita= Total GDP/ population
Real GDP is inflation adjusted
What's a recession?
Two successive quarters that show a decrease in GDP.
What's the definition of economic growth?
Economic growth is an increase in the capacity of the economy to produce goods and services.
What are the 3 ways to measure GDP?
Output= Gross value added + net product taxes + import duties
(Measures the value of goods and services produced adjusted for product and import taxes)
Income= Wages + profit + rent and interest + net product taxes
(Measures rewards payed to factors of production)
Expenditure= consumption + investment + government spending + net trade
(Measures expenditure associated with consumption, investment, government spending and trade)
What's inflation? What's the target? How is it measured? Is it really representative of all groups of the economy?
The rate of increase in average prices overtime.
Target: 2%
Measure: CPI (consumer price index)- represents consumer spending. Basket of goods-750 commonly bought products.
No, doesn't represent those in a fixed income (income isn't rising with inflation), especially pensioners. Doesn't represent groups with a higher income.
What's the definition of unemployment?
Unemployment- not currently working but are available for work and have, of working age and are either looked for work in the past week or are waiting to start and job that's already obtained. (Is when someone is able to work and actively seeking work but not currently working)
What is one of the ways unemployment is measured in the UK (better way)?
ILO Labour Force survey- carried out by International, labour organisation. measuring unemployment (more accurate, 80,000 households across the UK are sampled, 1 face-to-face interview and then phone calls every quarter. Ask if anyone in the house has been out of work for 4 weeks and ready to start in 2 weeks, is so, they're unemployed. An estimate is made for the whole country based off of this.
What's the claimant count, what does it measure and how?
Measures unemployment. By measuring how many people are claiming unemployment benefits e.g jobs seekers allowance.
What are index numbers used for?
What can't they be used for?
Comparing data, analysing data and representing data in simple terms.Avoids a secondary axis.
No information or underlying data, may not accurately reprint those inter for, no units so can't analyse exact values
How do you calculate index numbers?
Who's own the factors of production? What do they gain?
Consumers/ households won they factors or production and they are payed.
What's the multiplier effect?
What's income?
Income measure the flow of money a person or economy receives each year. Can turn into wealth
What's wealth?
Wealth is the sum, or stock, of all of your assets added up.
What are economic policies?
Economic policies are actions taken by government to influence economic performance
What are fiscal policies?
Taxes, spending and investment decisions taken by the government.
What are Monetary policies?
Money, supply and interest rates, taken by the central bank.
What are supply side policies?
Rules, regulations and incentives, implemented by the government
What are injections? What are examples?
Money flowing into the circular flow of income. Spending, exports and government spending.
What are withdrawals/ leakages and what are examples?
Money leaking out of the circular flow of income. Savings, imports and taxation.
Note 
Flashcard (29)