Summary
Summary Macroeconomics Key Words & Definitions
- Module
- Macroeconomics
- Institution
- AQA
A list of 83 key terms with definitions for Macroeconomics.
[Show more]
Content preview
The circular flow of income A model of the economy which shows the flow of goods, services and factors and their payments around the economyInvestment Expenditure undertaken by firms to add to the capital stock
Taxation A levy/charge by the overnment on householders (VAT, income tax) and firms (corporation tax, capital gains tax)
Savings Income not spent on consumption
J Injections (investment, exports, government spending)
W Withdrawals (taxation, savings, imports)
J=W Economy is stable
J>W There is economic growth, GDP is increasing
J<W There is a recession, GDP is decreasing
The multiplier process Any injection into the circular flow of income will increase national income by a multiplied amount, denoted by 'K'
Aggregate demand The total level of demand in an economy at any given price level at any given time
Aggregate supply The total amount of production in an economy at any given price level at any given time
Negative output gap When Ya<Yf, there is unemployment, spare capacity, little inflation and low confidence
The economic cycle A recognised pattern of economic activity (aka changes to GDP) recorded in the macroeconomy over time (3-5 years)
GDP Gross Domestic Product
Growth Sustained rises in GDP over time
Boom The point at which GDP is highest
Downturn When GDP starts to contract afer a period of growth
Recession A period of 2 consecutive quarters of falling GDP
Slump The point at which GDP is lowest
Recovery A period in which GDP shows first signs of improvement
Eg. changes to spending, credit, wealth effects, investment spending, government finances, X/M, planned spending
Demand-side economic shocks (interest, tax, exchange rates)
Supply-side economic shocks Eg. changes in price of factors of production, depletion of raw materials, (advances in technology)
Inflation The sustained
A measure rise in themeasures
of inflation, general level of prices
changes in theover
pricetime and
level of the decrease
a market in the
basket purchasinggoods/services
of consumer power of moneypurchased
Consumer Price Index (CPI) by households
Demand-pull inflation Rising levels of AD pull up the price level of GDP
Cost-push inflation Rising costs for the factors of production push up the price charged for output, eg wage cost inflation
Imported inflation A lower value currency makes imports appear more expensive
Inflationary noise The distortion of the functions of price caused by inflation
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller rhudsonoldnall. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £2.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
64438 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now