Economic macroeconomic definitions
description
Transcript of Economic macroeconomic definitions
![Page 1: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/1.jpg)
MacroeconomicsSemester 2
![Page 2: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/2.jpg)
![Page 3: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/3.jpg)
![Page 4: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/4.jpg)
![Page 5: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/5.jpg)
![Page 6: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/6.jpg)
![Page 7: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/7.jpg)
![Page 8: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/8.jpg)
![Page 9: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/9.jpg)
![Page 10: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/10.jpg)
C = all household consumption on durables, non-durables and services I = firm’s replacement investment (spending on capital to maintain productivity) or induced investment to
increase production G = all government spending X-M = spending by foreigners on exports less domestic spending on imports
![Page 11: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/11.jpg)
![Page 12: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/12.jpg)
![Page 13: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/13.jpg)
![Page 14: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/14.jpg)
![Page 15: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/15.jpg)
![Page 16: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/16.jpg)
![Page 17: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/17.jpg)
![Page 18: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/18.jpg)
![Page 19: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/19.jpg)
![Page 20: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/20.jpg)
Business Cycle
Peak
Trough
Trough
ExpansionPeak
Real GDP
Potential GDP
![Page 21: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/21.jpg)
A recession is when the economy experiences two consecutive quarters of falling GDP.
Recession
![Page 22: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/22.jpg)
![Page 23: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/23.jpg)
Government Spending + Taxation
![Page 24: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/24.jpg)
![Page 25: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/25.jpg)
![Page 26: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/26.jpg)
![Page 27: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/27.jpg)
![Page 28: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/28.jpg)
Macroeconomic Goals
Growth
Employment
Price Stability
External Stability
Income Distribution
![Page 29: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/29.jpg)
Inflation
Is a sustained increase in the general level of prices and a fall in the value of money
LRASAS
AD
![Page 30: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/30.jpg)
Deflation
Is a persistent fall in the average level of prices in an economy.
![Page 31: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/31.jpg)
Demand Pull inflationIs inflation that is caused by increasing AD in an economyThat shifts the AD curve to the right
AD1AD2
AS
![Page 32: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/32.jpg)
Cost Push inflationIs the inflation that is caused by a increase inThe cost of production in the economyThat shifts the SRAS curve to the left.
AD
AS1
AS2
![Page 33: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/33.jpg)
UnemploymentIs a situation that exists when people who are willing and able to work cannot get a job
![Page 34: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/34.jpg)
Full employmentExists when the number of jobs available in an economy is equal to or greater than the number of people actively seeking work
![Page 35: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/35.jpg)
Underemployment
When workers are carrying out jobs for which they are over qualified, that is they are not using their full skills and abilities or when workers are employed part time, even though they are available for full time employment, or when workers in a planned economy are undertaking jobs that would not exist in a free market
![Page 36: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/36.jpg)
Demand deficientOr
Cyclical unemploymentIs unemployment that exists when there is insufficient AD in the economy and real wagesDo not fall to compensate for this
![Page 37: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/37.jpg)
Direct taxationIs taxation imposed on people’s income or wealth, and on
firms profit.
![Page 38: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/38.jpg)
Indirect TaxationIs tax on expenditure. IT is added to the selling price of a good or service
![Page 39: Economic macroeconomic definitions](https://reader038.fdocuments.in/reader038/viewer/2022103014/5472309eb4af9f980a8b4dab/html5/thumbnails/39.jpg)