macro

• aggregate demand- total level of demand for a countrys goods and services at a given price level.
• aggregate supply is the total levels of goods/ services a country can produce at a given price
• INLFATION: the increase in price for goods/ services due to a depreciation of the value of currency
• deflation: decrease in prices over time, usually caused by an economic downturn or recession
• inflation targeting: monetary policy that aims to achieve a specific inflation rate through interest rates
• monetarism: theory that states money supply determines nominal GDP growth
• demand pull inflation: when Agg demand pushes prices up because supply cannot rise quickly enough to meet an increase in demand
• cost push inflation: when costs (wages) are pushed up which increases production costs and therefore leads to higher prices
• fiscal policy: changes made to taxation and public spending to influence AD
• supply side policies: government intervention aimed at increasing aggregate supply
• market failure: where market forces do not allocate resources efficiently or effectively
• keynesian lras:  long-run aggregate supply curve is perfectly elastic at low output, then upward sloping over a range of output and finally perfectly inelastic at the full employment level of output
• classical lras: curve is a vertical line at the full employment level of resources. This is because they think that in the long run the economy will operate at the full employment level of resources
• unemployment: people without work who are searching for work
• economically inactive: people not in work who are not seeking work
• employment: people in work
• underemployed: a person not having as much work as they desire
• frictional unemployment: occurs when there is a mismatch between what employers want and what workers have to offer
• structural unemployment: occurs due to changes in technology or globalisation which means some jobs become obsolete
• cyclical unemployment: caused by fluctuations in demand for goods and services
• structural unemployment: occurs due to changes in technology, globalisation or government policy which means some jobs become obsolete
• unemployment rate = number unemployed / labour force x 100
• seasonal unemployment: only being employed within certain parts of the year
• GDP: total value of all goods or services produced by a country per year
• HDI: measure of development including gni , life expectancy and education
• income inequality: difference in income between social classes
• lorenz curve: relationship between real and normal interest rate
• gini coefficient: measure of inequality going from 0-1, with zero being perfect equality
• real interest rate: nominal interest rate minus inflation
• relative poverty: living below average income
• absolute poverty: living below the poverty line