Fichas
Macro Key Words
Fichas del conjunto (77)
- 1Accelerator Effect"When planned capital investment has a positive correlation with the past and expected growth of consumer demand or national income."
- 2Aggregate Supply Shock"Either an inflation shock or a shock to potential national output."
- 3Appreciation"The rise in the market value of one exchange rate against another."
- 4Austerity"Economic policy aimed at reducing a government's deficit."
- 5Automatic Stabilisers"Automatic fiscal changes as the economy moves through stages of the business cycle."
- 6Brain Drain"Movement of highly skilled people from their own country to another nation."
- 7BRIC Economies"Brazil, Russia, India and China. Emerging Markets."
- 8Bubble"When the prices of assets rise sharply at a sustained rate exceeding fundamental valuations, making a sudden collapse likely. (e.g. 2007-08 recession caused by housing market bubble bursting.)
- 9Budget Deficit"When government spending is greater than tax revenues."
- 10Capacity Utilisation"Measures how much of the productive potential of the economy is being used. Falls during a recession, leading to a rise in spare capacity."
- 11Capital Market"A stock or a bond market where firms can raise money for investment purposes."
- 12Capital Stock"Value of the total inventory of capital inputs in the economy."
- 13Capital-Labour Substitution"Replacing workers with machines in a bid to increase productivity and reduce unit cost of production."
- 14Claimant Count"The number of people claiming unemployment-related benefits."
- 15Closed Economy"Economy operating without imports or exports."
- 16Comparative Advantage"The relative advantage that one country holds over another. Countries may benefit in specialising in exporting products for which it has the lowest opportunity cost."
- 17Consumer Price Index (CPI)"Measures the change in price of a weighted basket of consumer goods and services (excluding housing costs.)"
- 18Corporation Tax"Tax on the profits made by companies - 19% in the UK as of April 2017 Budget."
- 19Cost-push Inflation"An increase in the average price level caused by a sustained increase in firms' costs of production."
- 20Creeping Inflation"Small rises in the general price level over a long period."
- 21Current Account"Overall balance of credits minus debits for trade in goods and services, investment income and transfers."
- 22Cyclical Trade Deficit"Trade deficit that arises purely due to changes in the economy's cycle."
- 23Cyclical Unemployment"Unemployment caused by a lack of AD for goods and services. National output smaller than potential output leading to a negative output gap."
- 24Deflation"A sustained fall in the average price level of goods and services in an economy."
- 25Depreciation"A fall in the market value of one exchange rate against another."
- 26Depression"Severe recession where a nation's GDP falls by at least 10%."
- 27Deregulation"Reducing barriers to entry in order to make a market more competitive."
- 28Discretionary Fiscal Policy"Deliberate attempts to affect AD using changes in government spending, taxation and borrowing."
- 29Discretionary Income"Disposable income adjusted for spending on essential bills e.g fuel."
- 30Disposable Income"The value of money coming into a household, minus taxes."
- 31Dumping"When a producer in one country exports a product at a price below that it charges in its home market, or below the costs of supply."
- 32Economic Cycle"Variations in the annual rate of growth of an economy over time."
- 33Economic Shocks"Unpredictable events, such as volatile commodity prices."
- 34Expansionary Monetary Policy"A relaxation of monetary policy means an attempt to use and expansionary monetary policy to boost AD, output and jobs."
- 35Expenditure-switching Policies"Policies aimed at 'switching' expenditure from imports to domestically produced goods in order to improve b.o.p and stimulated GDP growth."
- 36Fiscal Deficit"Occurs when government expenditure is greater than the revenue from tax receipts in a particular year."
- 37Fiscal Policy"Government's ability to affect economic activity through changes in tax and public spending."
- 38Foreign Direct Investment (FDI)"An investment made from one country into another."
- 39Free Trade"When trade is allowed to occur without any form of restriction such as a tariff."
- 40G7"A group of seven major industrialised countries - Canada, France, Germany, Italy, Japan, the UK and the USA."
- 41GDP"Gross Domestic Product - total value of income/output/expenditure in an economy."
- 42Gini Coefficient"A measure of the extent to which poor households receive less than an equal share of income (income inequality.)"
- 43Globalisation"Deepening of relationships between countries of the world, reflected in increasing levels of overseas trade and investment."
- 44Gross National Income (GNI)"Income generated from the resources owned by inhabitants and businesses of a given country."
- 45Hot Money"Money that flows freely and quickly around the world looking to earn the best rate of return."
- 46Human Capital"Investment in education and training to increase the quality and flexibility of the labour force."
- 47Human Development Index (HDI)"An index to assess comparative levels of development in countries. Quantified in terms of literacy, life expectancy and purchasing power."
- 48Income Elasticity of Demand (YED)"Responsiveness of demand to a change in real income."
- 49Inflation"A sustained increase in the general/average price level for goods and services."
- 50Innovation"Changes to products or production processes. Important in improving dynamic efficiency and quality of goods and services."
- 51Investment"Spending on capital goods - including machinery and infrastructure."
- 52Labour Supply"The number of people able, available and willing to work at a given wage rate."
- 53Liquidity"The ease with which something can be converted to cash with little loss of value."
- 54Liquidity Trap"When very low interest rates have a strong effect on AD."
- 55Marginal Propensity to Consume (MPC)"The proportion of any additional income that is dedicated to spending."
- 56Marginal Propensity to Save (MPS)"The proportion of any additional income that is dedicated to saving."
- 57Marginal Rate of Tax"The rate of tax on the next unit (£1) of income earned."
- 58Money Supply"The entire quantity of a country's commercial bills, coins, loans and credit."
- 59Moral Hazard"When an insured party decides to take higher risks because they believe their losses be covered by someone else."
- 60Multiplier Effect"An initial injection into an economy causing a greater final increase in real GDP."
- 61Nationalisation"Bringing a privately owned asset, such as a company, under state control."
- 62Net Trade"The balance between the value of exports and imports."
- 63Nominal GDP"Monetary value of all goods and services produced expressed at current prices."
- 64Output Gap"Difference between actual and potential national output. A negative output means that an economy has a large margin of spare productive capacity."
- 65Paradox of Thrift"Consumers saving more in a recession reduces consumption and therefore AD. This impedes economic growth and thus lowers the general level of savings."
- 66Phillips Curve"Statistical relationship between unemployment and inflation."
- 67Price Stability"When there is low inflation and the price changes that occur have little effect on consumers' day-to-day decisions."
- 68Productive Potential"Productive capacity of the economy - boosted by high quality investment."
- 69Productivity"Measure of efficiency. How many units of output per worker per hour."
- 70Marginal Propensity to Import"Proportion of any change in income that is spent on overseas products."
- 71Marginal Propensity to Save"Proportion of any change in income that is saved rather than spent."
- 72Protectionism"Restricting trade through tariffs and other forms of import controls."
- 73Purchasing Power"The buying power of a unit of currency. Inversely related to inflation."
- 74Quantitative Easing (QE)"Introduction of new money into national supply by a central bank. Idea is to encourage banks/people to borrow and spend more to offset deflation."
- 75Recession"Two consecutive quarters of negative economic growth."
- 76Remittances"Sending of money to consumers in another economy."
- 77Retail Price Index (RPI)"Similar to CPI however includes housing payments and excludes the top 4% of earners."
Información
- Descripción
- Edexcel Macroeconomics Key Terms Flash Cards
- Creado por
- Alex Brownlie
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