Edexcel Economics 10. Macroeconomic Strategies and Policies

Description

Term

That which is divided into four tiers, namely; very high human development (0.8 - 1.0), high human development (0.7 - 0.79), medium human development (0.55 - 0.69), and low human development (below 0 - 0.54)

Those schemes which are criticised as it is difficult to know at what to set the minimum and maximum prices due to uncertainty of the equilibrium price, storage is expensive and perhaps unsustainable indefinitely, and non-member countries can undermine them

A process by which an increase in government expenditure reduces the ability of the private sector to invest by raising the cost of borrowing (interest rates) as may occur due to government deficit financing, thereby weakening the multiplier effect

That which governments try to achieve via monetary stability such as maintaining a low and stable inflation rate, financial stability such as maintaining sufficient liquidity, fiscal stability such as reducing fiscal deficits and the national debt, and policies allowing for the accommodation of external shocks

A group of economists prominent in the 1970s who believed that the macroeconomy always adjusts rapidly to the full-employment level of ouput, and that monetary policy should be the prime instrument for stabilising the economy

A hypothesis that the price of primary commodities declines relative to the price of manufactured goods over time, causing the terms of trade of primary product-based economies to deteriorate

A process of transforming an economy by expanding manufacturing and other industrial activity

That policy the success of which is largely dependent on the position of the world economy, the structure of an barriers to trade present in the markets on which the country focuses, and the skills and technical standards available domestically

Those countries that are characterised by low per capita income, poor living standards, low investment in human capital, low productivity, low savings ratios, a high proportion of the population being employed in primary production, a lack of diversification in production, poor financial infrastructure, unemployment, underemployment, etc.

That type of policy the use of which to counter a recession is subject to severe time lags in recognising the problem, implementing the measures, and effecting a change in behaviour, while it may also lead to higher public sector debt if the government doesn't run a surplus during a boom to match the deficit in a recession

Description

Term

That the maintenance of which is considered crucial to the improvement or maintenance of international competitiveness

A common form of land tenure in less developed countries in which the landlord and tenant divide the crop yield between themselves, sharing the risk but not incentivising an increase in efficiency on the part of the tenant while also allowing for asymmetric information and the principal-agent problem

The nine member (four being appointed by the Chancellor) body of the Bank of England which meets eight times a year to act on its responsibility over the conduct of monetary policy

One of the two traditional banking sectors, providing high-street services to depositors (households, small firms, etc.) mainly on a relatively small scale, and providing a distributed branch banking service

That measure which is criticised as a measure of development as it doesn't take into account the informal economy (50.2% of total employment in Ethiopia in 1999) or income distribution and inequality

The banker to the government, performing a range of functions which may include issue of coins and banknotes, acting as banker to the commercial banks, and acting as regulator of the financial system

That which individuals and firms might hold (not save) so as to facilitate transactions (largely dependent on income), ensure liquidity as a precautionary measure against sudden payments or opportunities (largely influenced by the interest rate), and to speculate on the future value of financial assets (largely determined by the interest rate and the price of said assets)

The ratio of a bank's capital to its current liabilities and risk-weighted assets

Those countries that often don't borrow money from foreign private sector sources like foreign commercial banks as they face difficulty in obtaining such loans and may struggle to repay the debt if; interest rates increase, there is a fall in exports, the project the loan funded was unsuccessful, etc.

A multilateral institution that provides short term financing for countries experiencing balance of payments problems in exchange for the implementation of policies to address the problem long-term