Macro As Economics.

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Macro As Economics. by Mind Map: Macro As Economics.

1. Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of interest, income {dividend}, or appreciation of the value of the instrument

2. Economic Growth

2.1. Long Term

2.1.1. General level of economic growth is around +2% per annum.

2.1.2. It is the continuous growth of an Economy resulting in the outward shift of the PPF through the development of the four economic resources

2.1.3. Capital goods shift the growth of an economy more than consumer goods.

2.2. Short term

2.2.1. Short term is the annual percentage change in GDP

2.2.2. It is the use of the spare capacity within an economy and a PPF

2.3. Government Intervention

2.3.1. Supply Side

2.3.1.1. Policies

2.3.1.2. Initiatives

2.3.2. Demand Side

2.3.2.1. Monetary

2.3.2.1.1. Policies involving changing the interest rate and/or the supply of money to achieve macroeconomic policy objectives.

2.3.2.2. Fiscal Policy

2.3.2.2.1. Changes in the expenditures or tax revenues of the federal government, undertaken to promote full employment, price stability and reasonable rates of economic growth

2.4. Index Numbers

2.4.1. Can be used to show changes of countries

2.4.2. Base Year=100

2.4.2.1. Making it easier to use over time

3. Current Account

3.1. Deficit

3.1.1. Deficit is more Imports than Exports

3.2. Surplus

3.2.1. More Exports than imports

3.3. the Current Account is the difference between a country's savings and its investment.

3.4. Goods And Services

3.4.1. Goods are physical products where as services are financial law, banking etc.

4. Stages Of Economic Cycle

4.1. Boom

4.2. Recession

4.3. Slump

4.4. Recovery

5. Main Economic Objectives

5.1. Low Inflation

5.2. Steady and sustained growth

5.3. High levels of employment

5.4. General increase in the standard of living over time

6. Unemployment

6.1. Classical

6.1.1. The component of overall unemployment caused by too high wage expectations

6.2. Frictional

6.2.1. The unemployment which exists in any economy due to people being in the process of moving from one job to another

6.3. Structural

6.3.1. Structural unemployment exists where there is a mismatch between their skills and the requirements of the new job opportunities.

6.4. Hidden

6.4.1. Unemployment can sometimes not show a true figure because some people dont claim benefits and therefore are not included in the claimant count.

6.5. Cyclical

6.5.1. A type of unemployment explained by the demand for labor going up and down with the business cycle

6.6. Seasonal

6.6.1. Unemployment due to seasonality in demand or supply of a particular good or service. Examples of this would be working in the Skiing season but not having work during the summer

7. Inflation

7.1. Deflation

7.1.1. the general price level is falling and the value of money is increasing

7.2. Hyperinflation

7.2.1. hen hyperinflation occurs, the value of money becomes worthless and people lose all confidence in money both as a store of value and also as a medium of exchange.

7.3. Demand Pull Inflation

7.3.1. Causes

7.3.1.1. A depreciation of the exchange rate

7.3.1.2. Higher demand from a fiscal stimulus

7.3.1.3. Monetary stimulus to the economy

7.3.1.4. Faster economic growth in other countries

7.4. Cost Push Inflation

7.4.1. Component costs

7.4.2. Rising labour costs

7.4.3. Higher indirect taxes imposed by the government

7.5. inflation is a rise in the general level of prices of goods and services in an economy over a period of time

7.5.1. New node

8. Definitions

8.1. Unemployment

8.1.1. Those without a job but who are seeking work a current wage rates

8.2. GDP

8.2.1. Gross Domestic Product measures of national income which exclude net income from investments abroad,and dont include an allowance for the depreciation of a nations capital stock.

8.3. Recession

8.3.1. When a economy is growing at less than its long term trend rate of growth

8.4. Fiscal Policy

8.4.1. Changes in the expenditures or tax revenues of the federal government, undertaken to promote full employment, price stability and reasonable rates of economic growth.

8.5. Aggregate Supply

8.5.1. The total supply of goods and services produced within an economy at a given overall price level in a given time period. It is represented by the aggregate-supply curve, which describes the relationship between price levels and the quantity of output that firms are willing to provide.

8.6. Macroeconomics

8.6.1. The study of economics in terms of whole systems with reference to general levels of output and income and to the interrelations among sectors of the economy

8.7. Inflattion

8.7.1. Inflation has been defined as a process of continuously rising prices, or equivalently, of a continuously falling value of money.

8.8. Investment

8.9. Capital

8.9.1. Policies involving changing the interest rate and/or the supply of money to achieve macroeconomic policy objectives.

8.10. Monetary Policy

8.10.1. Policies involving changing the interest rate and/or the supply of money to achieve macroeconomic policy objectives.

8.11. Economic Growth

8.11.1. An increase in the total output of an economy. That is usually when the society acquires new resources or when society learns to produce more with existing resources, its total output increases.

8.12. Output Gap

8.12.1. .the difference between the potential output and actual output; ngative output gaps are called recessionary gaps; positive output gaps are called inflationary gaps.

8.13. Aggregate Demand

8.13.1. The total demand of all potential buyers of a commodity or service. Includes all individuals and organizations that have the ability, willingness, and authority to purchase such products

8.14. Deflation

8.14.1. Deflation is a continuous and persistant fall in the price level and increase in the value of money

8.15. Budget Deficit

8.15.1. The difference between the federal government’s income and its spending in a given fiscal year, when spending exceeds income.

8.16. Exchange Rates

8.16.1. The price at which two national currencies exchange.

8.17. Supply Side

8.17.1. Supply side policies are policies that governments designed to increase the productive potential of the economy and push the long run aggregate supply curve to the right.

8.18. Consumption

8.18.1. The process in which the substance of living is completely destroyed, used up, or incorporated or transformed into something else. Consumption of goods and services is the amount of them used in a particular time period

8.19. Current account

8.19.1. The difference between total imports and total exports, also taking into account service payments and receipts, interest, dividends and transfers. The current account can be in deficit or surplus