Hint
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Answer
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Total expenditure on goods and services within an economy at a certain price and time period
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Aggregate Demand
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Belief that excessive inflation and recession is temporary
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Classical theory
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WPIDEC
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Weaker Pound Imports Dearer Exports Cheaper
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Belief that sometimes government intervention is needed during periods of recession and inflation in order to avoid markets spiralling out of control
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Keynesian theory
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The change in consumer spending following a change in income
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Marginal propensity to consume
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The outlook that consumers have towards the economy and their own financial situation
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Consumer Confidence
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Change in income generates a further change in consumption
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Income Effect
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Monetary value of all goods and services produced within an economy in a given time period (1 year)
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GDP
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Total expenditure on capital goods by firms within an economy at a certain price and within a certain amount of time
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Investment
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How much (%) an economy grew over the period of 1 year
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Economic Growth
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Assets lose qualities through daily use and technology becoming obsolete
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Depreciation
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Concerned with the study of the whole economy and the effect of changes in the international economy on a country
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Macroeconomics
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Sustained rise in general price level
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Inflation
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Change in injections generates further change in aggregate demand
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Multiplier Effect
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The price of a certain currency in terms of other currencies
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Exchange Rate
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Total expenditure by the government on goods and services in an economy at a certain price and time
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Government expenditure
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Total value of exports - imports of goods and services within an economy at a certain price and time
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Net Exports
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Examples include sudden price changes in commodities, pandemics, war, natural disaster, etc..
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External shocks
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SPICED
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Stronger Pound Imports Cheaper Exports Dearer
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Change in consumption generates further change in investment
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Accelerator Effect
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Total expenditure by households on goods and services within an economy at a certain price and within a certain amount of time
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Consumption
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Type of supply, at least one factor of production is fixed
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Short run aggregate supply
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Type of supply, All factors of production are variable and can be adjusted accordingly
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Long run aggregate supply
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