Economic Activity and Applied Economic Analysis

Flashcards covering key concepts from the lecture on economic activity and applied economic analysis.

What are the two types of living standards discussed in economic activity?

Material and non-material living standards.

What does the five-sector circular flow model represent?

It represents the flow of goods, services, and money in an economy.

What are the three types of economic indicators?

Leading, lagging, and coincident indicators.

What is aggregate demand?

The total demand for all goods and services in an economy at a given overall price level and in a given time period.

What factors can affect aggregate demand?

Consumer spending, investment, government spending, and net exports.

What is the importance of aggregate supply?

It indicates the total supply of goods and services that firms in an economy are willing and able to sell at a given overall price level.

How is economic growth measured?

Using changes in real Gross Domestic Product (GDP).

What are potential benefits of economic growth?

Growth in material living standards, improved non-material living standards, employment opportunities, and economic development.

What are some potential costs of economic growth?

Boom and bust economic cycles, congestion, pollution, environmental damage, inequality, and 'affluenza'.

What are limitations of real GDP as a measure?

It does not account for income distribution, environmental factors, or the informal economy.

What is wealth and income inequality?

The unequal distribution of assets and income among individuals or groups within a society.

Why is the changing labor market important at various levels?

It affects income distribution, employment rates, and economic stability locally, nationally, and internationally.

What economic responses can agents take to address economic issues?

Policies such as taxation changes, subsidies, regulations, or economic stimulus measures.