A level Macroeconomics key terms Part 2

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Last updated: October 13, 2022

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Hint	Answer
Prolonged downturn in the economy where a nations GDP falls by at least 10%	Depression
Sustained fall in general price level	Deflation
Inflation caused by increases in the costs of production	Cost push
Type of UE: National Minimum Wage is too high	Real Wage
A concept that describes recessions that lead to a permanent downward shift in the trend growth of GDP	Hysteresis
Inflation caused by excess demand in the economy	Demand pull
Type of UE: Variations in the level of employment due to seasonality of activity	Seasonal
The more qualified, the more transferable skills one has	Occupational mobility
People who are able, available, willing and actively searching for work	Unemployment
Trade in goods	Visible
Measures the value of all goods and services taking into account the rise in the general price level	Real GDP
When the level of actual GDP > trend growth GDP	Positive output gap
When the level of actual GDP < trend growth GDP	Negative output gap
Deflation caused by a fall in AD	Malign
Measures the value of all goods and services produced at the market price level of the day	Nominal GDP
Short term fluctuations of National Output around its long term trend	Business cycle
Type of UE: Temporary UE when people are between jobs	Frictional
Type of UE: People refusing jobs	Voluntary
Records all financial transactions made between consumers, businesses and the government in one country with another nation	Balance of payments

Hint	Answer
A fall in the rate of inflation	Disinflation
The purchasing power of one currency in one economy compared to the purchasing power of the same currency in a different economy	Purchasing Power Parity
A concept that describes how recessionary periods can lead to opportunity and development	Creative destruction
A period of at least 6 months when a country suffers a fall in output	Recession
The ease and ability of labour to move to places with high demand for labour	Geographical mobility
A phase after a recession during which rGDP starts to increase and unemployment starts to fall	Recovery
A period when the rate of real GDP is faster and higher than the long term trend	Boom
Trade in services, transfers of income and other payments or reciepts	Invisible
Little incentive for workers with low income to earn extra income as it would result in higher tax and lower benefits	Poverty Trap
The total value of goods and services produced by a country's residents at home or abroad	GNI
A measure of the price level of a basket of goods and services	CPI
Those who are underemployed or willing to take a job if offered, but not actively looking for one	Hidden Unemployment
Type of UE: A mismatch of skills	Structural
Rapid inflation; up to 50% per month	Hyperinflation
Type of UE: Generated by a fall in demand	Cyclical
A weakening of the rate of growth; GDP is still rising but increasing at a slower rate	Slowdown
JSA	Job Seekers Allowance
Deflation caused by a rise in AS	Benign