Introduction to Macroeconomics

Flashcards covering key concepts and definitions in macroeconomics from the lecture notes.

Macroeconomics

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

Microeconomics

The branch of economics that studies individual units such as households and firms, analyzing their decisions and behavior in the allocation of resources.

Gross Domestic Product (GDP)

The total value of all goods and services produced within a country during a specific period, usually measured annually.

Full Employment

A situation in which all economic resources are fully utilized, generally characterized by an unemployment rate of around 3-4%.

Price Stability

A condition where the prices of goods and services in an economy remain stable, avoiding excessive inflation or deflation.

Balance of Payment (BOP)

An account that records a country's transactions with the rest of the world, showing payments to and receipts from other countries.

Equitable Distribution of Income

A state in which income is distributed fairly among all income groups, minimizing the income gap.

Contractionary Fiscal Policy

Government actions that aim to slow down economic growth by increasing taxes or decreasing government spending.

Expansionary Fiscal Policy

Government actions that aim to stimulate economic growth by decreasing taxes or increasing government spending.

Contractionary Monetary Policy

Central bank policies that reduce the money supply to curb inflation.

Expansionary Monetary Policy

Central bank policies that increase the money supply to stimulate economic growth, often used during periods of recession.