Economic performance

• Economic cycle: Upswings and downswings in aggregate economic activity over a period of time.
• Balance of payments equilibrium: Occurs where the balance of payments is relatively balanced over a few years.
• Balance of trade: Difference between the monetary value of an economy's exports and their imports.
• Export-led growth: Economic growth arising from and increase in exports as a component of aggregate demand, in the short run.
• Balance of trade deficit: When the monetary value of an economy's imports exceed their exports.
• Inflation: The persistent rise in the average price level.
• Involuntary unemployment: When there are no jobs available at the market wage rate for those willing and able to work.
• Balance of trade in goods: Part of the current account comparing the difference in the monetary value of an economy's exported goods and their imported goods.
• Long run economic growth: An increase in the productive potential of the economy.
• Balance of trade in services: Part of the current account comparing the difference in the monetary value of an economy's exported services and their imported services.
• Long run Phillips curve: Vertical curve that depicts the role of expectations in the inflationary process.
• Negative output gap: How much lower actual real output is than the trend output level.
• Balance of trade surplus: When the monetary value of an economy's exports exceed their imports.
• Net investment income: Difference between income earned by UK assets located abroad and income earned by foreigner-owned assets located in the UK.
• Output gap: The difference between actual real output and the trend output level.
• Closed economy: A country with no international trade.
• Policy conflict: Occurs when two policy objectives interfere and thus cannot be met simultaneously.
• Cost push inflation: A rise in the price level due to an increase in costs of production.
• Current account of balance of payments: Measures monetary flow into/out of an economy based on balance of trade in goods and services, primary income and secondary income.
• Recession: A fall in real GDP for 6 months or more.
• Current account deficit: When currency outflows in the current account exceed currency inflows.
• Positive output gap: How much higher actual real output is than the trend output level.
• Seasonal unemployment: Unemployment caused by the changes in the seasons of the year.
• Transfers: Payments between countries, with which nothing of economic value is given in return.
• Seasonal fluctuation: Variations in economic activity caused by seasonal changes to the economy.
• Structural unemployment: Unemployment caused by the decline in certain industries.
• Voluntary unemployment: When workers choose to remain unemployed.
• Cyclical unemployment: Unemployment caused by a lack of aggregate demand (also known as demand deficient unemployment).
• Wage-cost inflation: A rising price level caused by an increase in wages.
• Deflation: The persistent fall in the average price level.
• Demand pull inflation: A rise in the price level due to an increase in aggregate demand.