Macroeconomics: The Bird's-Eye View of the Economy

These flashcards cover fundamental concepts and terminology in macroeconomics, highlighting key definitions and differences between types of analyses and policies.

Macroeconomics

The study of the economy as a whole, focusing on aggregate indicators like GDP, unemployment, and inflation.

Positive Analysis

Addresses the economic consequences of a particular event or policy without considering desirability.

Normative Analysis

Evaluates whether a policy should be used, often involving personal values and judgments.

Standard of Living

The degree to which people have access to goods and services making their lives easier, healthier, safer, and more enjoyable.

Trade Deficit

When the value of imports exceeds the value of exports.

Trade Surplus

When the value of exports exceeds the value of imports.

Fiscal Policy

Decisions that determine the government’s budget, including spending and tax revenues.

Monetary Policy

Determination of the nation’s money supply controlled by the central bank, affecting economic performance.

Unemployment Rate

The percentage of the labor force that is unemployed, generally rising during recessions.

Aggregation

The process of adding up individual economic variables to get economy-wide totals.

Inflation

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

Economic Growth

A process of steady increases in the quantity and quality of goods and services produced by an economy.

Productivity

A measure of economic performance that indicates how efficiently production inputs are being used to produce outputs.

Global Trade

The exchange of goods and services between countries, increasing interdependence among national economies.

Structural Policy

Government policies aimed at changing the underlying structure of the economy.