Friday, December 5, 2014

List of Definitions for Chapter 6 (CIE-A2): Macroeconomic Problems

1. Actual growth: An increase in the real GDP/ When points inside the PPC move towards its boundary

2. Birth rate: The average number of live births per thousand people in a country over a given time period, usually a year

3. Business/ trade cycle: Fluctuations in the national output of a country which involves a succession of stages or phases like boom, recession, slump and recovery

4. Death rate: The average number of deaths per thousand people in a country over a given time period, usually a year

5. Demand deficiency/ cyclical unemployment: Joblessness which is due to the fall in aggregate demand (AD)

6. Disguised unemployment: Joblessness that are not captured by the official statistic due to reasons like the stigma of claiming benefits and strict inclusion which resulted in many unemployed people being deliberately excluded

7. Economic development: A broader perspective that goes beyond an increase in the national output/ income to include factors that can affect the quality of life

8. Frictional/ search unemployment: Joblessness that will always exist in an economy because some people may take a longer time to move from one job to another

9. Full employment: The level of employment as a result of everyone who is willing and able to work having a job, with the exception of those who are frictionally unemployed

10. Migration: The movement of people from one area to another, either within or between countries

11. Natural rate of unemployment: The rate of unemployment that will exist even when the labour market is in the state of equilibrium/ even when the economy is running at full capacity

12. Optimum population: The number of people in a country that will produce the highest per capita economic return given that the existing resources are fully and efficiently utilised

13. Potential growth: An increase in the potential GDP/ When PPC shifts outward

14. Real wage/ classical unemployment: Joblessness that occurs because the real wage is above the equilibrium level

15. Regional unemployment: Joblessness that disproportionately concentrates in one particular region

16. Structural unemployment: Joblessness which is due to a change in the structure of an economy, say from manufacturing to service sector

17. Sustainability: It is when resources are being exploited in the most optimal way, benefiting not just the present generation but also the future generations  

18. Technological unemployment: Joblessness which is resulted from an improvement in the level of technology such as manual workers being replaced by machines

19. Voluntary unemployment: Joblessness that exists because some people have chosen not to work because they do not feel that wages at the existing equilibrium are high enough to justify them working

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