KEY TERMS (macro)

• What is economic growth?

  Increase in GDP over time
• What does GDP stand for?

  Gross Domestic Product
• What does GDP measure?

  The value of output produced within a country
• How is GDP per capita calculated?

  GDP divided by population
• What does employment refer to?

  People willing and able to work finding jobs
• What is unemployment?

  People willing and able to work cannot find jobs
• What is the claimant count?

  Measurement of unemployment via benefit claims
• What does the level of unemployment indicate?

  Total number of jobless people in the workforce
• What are the types of unemployment?

  • Cyclical unemployment: due to demand fall
  • Frictional unemployment: moving between jobs
  • Seasonal unemployment: demand decreases at times
  • Structural unemployment: decline of an industry
• What does distribution of income describe?

  How income is divided among individuals
• What is income?

  Flow of money over time for production use
• What is wealth?

  Monetary value of all owned assets
• What is price stability?

  General price level stays the same or rises slowly
• What is inflation?

  Sustained increase in the general price level
• What does 'real' refer to in economics?

  Value accounting for changes in price level
• What does 'nominal' refer to in economics?

  Value based on current prices
• What is the consumer price index (CPI)?

  Measure of the general price level
• What is government revenue?

  Amount of money the government receives
• What is government spending?

  Total money spent by the government
• What is a direct tax?

  Tax on income and wealth
• What is an indirect tax?

  Tax on spending imposed on producers
• What is a balanced budget?

  When revenue equals government spending
• What is a budget surplus?

  When revenue is greater than spending
• What is a budget deficit?

  When spending exceeds government revenue
• What is fiscal policy?

  Policy controlling the economy via revenue and spending
• What are progressive taxes?

  Taxes taking a greater percentage with higher income
• What is monetary policy?

  Policy controlling total money supply in the economy
• What is supply-side policy?

  Policy increasing a country's productive potential
• What is an externality?

  Impact of an economic transaction on a third party
• What is a positive externality?

  Benefit of an economic transaction for a third party
• What is a negative externality?

  Cost of an economic transaction for a third party
• What is taxation?

  Government collection of money from individuals
• What is a subsidy?

  Money given by government to encourage production
• What is state provision?

  Government supplying a good or service directly
• What is legislation?

  Law created by government to control behavior
• What is regulation?

  Rule from government that must be followed
• What is information provision?

  Government intervention to provide knowledge
• What is international trade?

  Exchange of goods and services between countries
• What are imports?

  Goods bought from abroad
• What are exports?

  Goods sold abroad