AQA A Level Economics :
Macroeconomics
2024 Exam Practice Test
macroeconomics - Answer>> involves the study of the whole
economy at the aggregate level
policy objective - Answer>> a target or goal that policy-makers
aim to 'hit'
short-run economic growth - Answer>> Growth of real output
resulting from using idle resources, including labour, thereby
taking up the slack in the economy
long-run economic growth - Answer>> an increase in the
economy's potential level of real output, and an outward shift of
the economy's production possibility frontier
Gross Domestic Product (GDP) - Answer>> the sum of all
goods and services, or level of output, produced in the economy
over a period of time, e.g. one year
real GDP - Answer>> a measure of all the goods and services
produced in an economy, adjusted for price changes or inflation.
The adjustment transforms changes in nominal GDP, which is
measured in money terms, into a measure that reflects changes
in the total output of the economy
nominal GDP - Answer>> GDP measured at the current market
prices, without removing the effects of inflation
recession - Answer>> a fall in real GDP for 6 months or more
,full employment - Answer>> according to Beveridge's
definitions, full employment means 3% or less of the labour force
unemployed. According to the free-market definition, it is the level
of employment occurring at the market-clearing real-wage rate,
where the number of workers whom employers wish to hire
equals the number of workers wanting to work
claimant count - Answer>> The method of measuring
unemployment according to those people who are claiming
unemployment-related benefits (Jobseeker's Allowance)
Labour Force Survey - Answer>> a quarterly sample survey of
households in the UK. Its purpose is to provide information on the
UK labour market. The survey seeks information on respondents'
personal circumstances and their labour market status during a
period of 1-4 weeks.
inflation - Answer>> a persistent or continuing rise in the
average price level
deflation - Answer>> A persistent or continuing fall in the
average price level
disinflation - Answer>> When the rate of inflation is falling, but
still positive
price index - Answer>> an index number showing the extent to
which a price, or a 'basket' of prices, has changed over a month,
quarter or year, in comparison with the price(s) in a base year
consumer prices index (CPI) - Answer>> The official measure
used to calculate the rate of consumer price inflation in the UK.
,The CPI calculates the average price increase of a basket of 700
different consumer goods and services.
retail prices index (RPI) - Answer>> the RPI is an older
measure used to calculate the rate of consumer price inflation in
the UK. Currently, the UK government uses the CPI for the
indexation of state pensions and welfare benefits and for setting a
monetary policy target, and the RPI for uprating each year the
cost of TV and motor vehicle licences, together sometimes with
taxes on goods such as alcoholic drinks.
indexation - Answer>> The automatic adjustment of items such
as pensions and welfare benefits to changes in the price level,
through the use of a price index.
balance of payments - Answer>> A record of all the currency
flows into and out of a country in a particular time period
current account of the balance of payments - Answer>>
Measures all the currency flows into and out of a country in a
particular time period in payment for exports and imports, together
with income and transfer flows
exports - Answer>> domestically produced goods and services
sold to residents of other countries
imports - Answer>> Goods or services produced in other
countries and sold to residents of this country
balance of trade - Answer>> the difference between the money
value of a country's imports and its exports. Balance of trade is
the largest component of a country's balance of payments on
current accounts.
, balance of trade deficit - Answer>> the money value of a
country's imports exceeds the money value of its exports
balance of trade surplus - Answer>> The money value of a
country's exports exceeds the money value of its imports
balanced budget - Answer>> when government spending
equals government revenue, which is mostly tax revenue
budget deficit - Answer>> When government spending is
greater than government revenue
policy conflict - Answer>> Occurs when two policy objectives
cannot both be achieved at the same time: the better the
performance in achieving one objective, the worse the
performance in achieving the other.
trade-off between policy objectives - Answer>> Although it may
be impossible to achieve two desirable objectives at the same
time, e.g. zero inflation and full employment, policy-makers may
be able to choose an acceptable combination lying between the
extremes, e.g. 2% inflation and 4% unemployment
recession - Answer>> 2 consecutive quarters of negative (real)
GDP growth
Keynesian economists - Answer>> Followers of the economist
John Maynard Keynes, who generally believe that governments
should manage the economy, particularly through the use of fiscal
policy.
Macroeconomics
2024 Exam Practice Test
macroeconomics - Answer>> involves the study of the whole
economy at the aggregate level
policy objective - Answer>> a target or goal that policy-makers
aim to 'hit'
short-run economic growth - Answer>> Growth of real output
resulting from using idle resources, including labour, thereby
taking up the slack in the economy
long-run economic growth - Answer>> an increase in the
economy's potential level of real output, and an outward shift of
the economy's production possibility frontier
Gross Domestic Product (GDP) - Answer>> the sum of all
goods and services, or level of output, produced in the economy
over a period of time, e.g. one year
real GDP - Answer>> a measure of all the goods and services
produced in an economy, adjusted for price changes or inflation.
The adjustment transforms changes in nominal GDP, which is
measured in money terms, into a measure that reflects changes
in the total output of the economy
nominal GDP - Answer>> GDP measured at the current market
prices, without removing the effects of inflation
recession - Answer>> a fall in real GDP for 6 months or more
,full employment - Answer>> according to Beveridge's
definitions, full employment means 3% or less of the labour force
unemployed. According to the free-market definition, it is the level
of employment occurring at the market-clearing real-wage rate,
where the number of workers whom employers wish to hire
equals the number of workers wanting to work
claimant count - Answer>> The method of measuring
unemployment according to those people who are claiming
unemployment-related benefits (Jobseeker's Allowance)
Labour Force Survey - Answer>> a quarterly sample survey of
households in the UK. Its purpose is to provide information on the
UK labour market. The survey seeks information on respondents'
personal circumstances and their labour market status during a
period of 1-4 weeks.
inflation - Answer>> a persistent or continuing rise in the
average price level
deflation - Answer>> A persistent or continuing fall in the
average price level
disinflation - Answer>> When the rate of inflation is falling, but
still positive
price index - Answer>> an index number showing the extent to
which a price, or a 'basket' of prices, has changed over a month,
quarter or year, in comparison with the price(s) in a base year
consumer prices index (CPI) - Answer>> The official measure
used to calculate the rate of consumer price inflation in the UK.
,The CPI calculates the average price increase of a basket of 700
different consumer goods and services.
retail prices index (RPI) - Answer>> the RPI is an older
measure used to calculate the rate of consumer price inflation in
the UK. Currently, the UK government uses the CPI for the
indexation of state pensions and welfare benefits and for setting a
monetary policy target, and the RPI for uprating each year the
cost of TV and motor vehicle licences, together sometimes with
taxes on goods such as alcoholic drinks.
indexation - Answer>> The automatic adjustment of items such
as pensions and welfare benefits to changes in the price level,
through the use of a price index.
balance of payments - Answer>> A record of all the currency
flows into and out of a country in a particular time period
current account of the balance of payments - Answer>>
Measures all the currency flows into and out of a country in a
particular time period in payment for exports and imports, together
with income and transfer flows
exports - Answer>> domestically produced goods and services
sold to residents of other countries
imports - Answer>> Goods or services produced in other
countries and sold to residents of this country
balance of trade - Answer>> the difference between the money
value of a country's imports and its exports. Balance of trade is
the largest component of a country's balance of payments on
current accounts.
, balance of trade deficit - Answer>> the money value of a
country's imports exceeds the money value of its exports
balance of trade surplus - Answer>> The money value of a
country's exports exceeds the money value of its imports
balanced budget - Answer>> when government spending
equals government revenue, which is mostly tax revenue
budget deficit - Answer>> When government spending is
greater than government revenue
policy conflict - Answer>> Occurs when two policy objectives
cannot both be achieved at the same time: the better the
performance in achieving one objective, the worse the
performance in achieving the other.
trade-off between policy objectives - Answer>> Although it may
be impossible to achieve two desirable objectives at the same
time, e.g. zero inflation and full employment, policy-makers may
be able to choose an acceptable combination lying between the
extremes, e.g. 2% inflation and 4% unemployment
recession - Answer>> 2 consecutive quarters of negative (real)
GDP growth
Keynesian economists - Answer>> Followers of the economist
John Maynard Keynes, who generally believe that governments
should manage the economy, particularly through the use of fiscal
policy.
