IGCSE Macroeconomics (without unemployment)

Recession

when growth in output falls or becomes negative for two consecutive quarters

Gross domestic product (GDP)

measures of national income or total value of output produced in an economy within a given period of time

Economic growth

growth in the actual GDP or productive potential of the economy, typically measured by growth in real GDP

Consumer price index (CPI)

a measure of the price level to measure inflation

Inflation

a sustained rise in price level

Cost-push inflation

inflation caused by increases in the cost of production in the economy

Demand-pull inflation

inflation caused by excess demand in the economy

Deflation

a sustained fall in price level

Disinflation

a fall in inflation rate

Trade deficit

when the total value of a country's imports is greater than the total value of its exports over a specific period

Consumption

total expenditure by households on goods and services over a period of time

Investment

the spending on capital goods (or the addition to the capital stock of the economy)

Saving

the proportion of households' disposable income which is not spent over a period of time

Interest rate

the reward for saving or cost of borrowing

Monetary policy

an attempt by central bank to manipulate the interest rates, money supply and exchange rates to achieve the policy objectives of an economy

Fiscal policy

decisions about government spending and taxation to influence the economy