Introduction to Macroeconomics

These flashcards cover essential vocabulary and concepts related to macroeconomics, including definitions and significance.

Macroeconomics

The branch of economics that studies the behavior and performance of an economy as a whole, focusing on aggregates like total consumption, total investment, and national income.

Microeconomics

The branch of economics that studies individual entities such as households and firms, examining their decisions regarding resource allocation.

Gross Domestic Product (GDP)

A measure of the total value of all goods and services produced in an economy during a specific period, usually one year.

Price Stability

A situation where prices in an economy remain stable over time, often associated with moderate inflation.

Equitable Distribution of Income

A situation in which the gap between income groups in a country is minimized, promoting economic fairness.

Fiscal Policy

Government policy regarding taxes and expenditures used to influence the economy.

Monetary Policy

Tools used by the government through the central bank to control the supply of money in the economy.

Unemployment

A situation where individuals capable of working are unable to find jobs, leading to wastage of resources.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Balance of Payments (BOP)

A financial statement that summarizes all transactions made between entities in one country and the rest of the world.