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Definition
| The quantity of output actually produced by an economy. Occurs when there is a shift inside an economy's production possibility curve (PPC) |
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Term
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Definition
The total quantity of goods and services that all buyers in an economy consume over a particular time period at a particular price level.
AD=consumption (C)+ investment (I) + government spending (G) + net exports (x-M) |
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Definition
| The total quantity of goods and service produced in an economy over a particular time period, at a given price level. |
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Definition
| An increase in the value of a currency in a floating exchange rate system. |
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Term
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Definition
A record (usually per year) of all transactions between the residents of a country and the residents of all other countries.
All payments recieved from other countries are called credits and all payments made to other countries are called debits. |
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Term
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Definition
Part of the balance of payments, it is the revenue from exports minus the expenditure on imports over a period of time.
Export revenue>import expenditure is called a trade surplus
Import expenditure>export revenue is called a trade deficit |
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Definition
| Foreign aid that is offered by an individual country to another country |
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| A specific type of commodity agreement amoung producers of commodities (typically agricultural producers) intended to limit price fluctuations, thus protecting producers. |
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Definition
| Fluctuations in the growth of real output, or real GDP, consisting of alternating periods of expanison (increases in real output) and contrations (decreases in real output) |
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Definition
| A factor of production, which does not occur naturally, including machinery, tools, equipment, buildings, etc. |
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Definition
| In the balance of payments, refers to the inflows of funds for the purchase of assets that have not been produced (natural resources), minus outflows of natural resources. |
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Definition
| The large-scale transfer of privately owned financial capital (funds) to another country. Used when residents want to diversify their holdings of foreign assets. |
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| Central Planned Economy (Command Economy) |
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Definition
| All economic activites are based on a 'central plan' made by the government about what and how much will be produced and the allocation of resources to achieve this. |
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Definition
| Agreements among producers that attempt to increase or stabilize world prices of commodities (agricultural goods) in order to protect against fluctuation prices. |
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| A type of trading bloc in which countries that have formed an agreement to eliminate any tariffs in trade between them. Example EEC |
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Definition
| Occurs when there are many buyers and sellers acting independently, so that no one has the ability to influence the price at which the product is sold in the market. |
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Definition
| Two or more goods that tend to be used together. When XED is less than 0. Examples: iPod, headphones; XBox, XBox games |
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Definition
| Spending by households (consumers) on goods and services |
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Definition
| A currency that can be freely exchanged for other foreign currancies. Developed countries have this type, example, Euro or USD |
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Term
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Definition
Caused by a fall in AS, in turn resulting from increases in wages or costs of production.
Left-ward shift of AS curve |
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Term
| Cross Elasticity of Demand (XED) |
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Definition
A measure of the responsiveness of the demand for 1 product to a change in price of another good.
XED= % change in Qd of product x
% change in price of product y
When XED>0 substitutes, XED<0 complements, XED=0 unrelated |
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Term
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Definition
In the balance of payments, the sum of the balance of trade (exports-imports) plus the balance on services or invisable balance (exports of services-imports of services).
When postive, there is a CA Surplus
When negative, there is CA deficit |
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