A-Level Macroeconomics Overview

The total demand for all goods and services in an economy at a given price level.

An increase in consumer spending, often triggered by lower taxes or increased disposable income, causing the AD curve to shift to the right.

A decline in consumer spending, often caused by unemployment or economic uncertainty, causing the AD curve to shift to the left.

The amount of goods and services that businesses are willing to produce at a given price level in the short run.

The increase in wages that firms have to pay, leading to higher production costs and a shift in the SRAS curve to the left.

A government scheme subsidizing wages, reducing production costs for firms and shifting the SRAS curve to the right.

Factors that affect the total supply of goods and services in the long run, including technology, resources, labor force, and capital stock.

The use of technology to improve production processes and efficiency, leading to a shift in the LRAS curve to the right.

A type of unemployment that occurs when people are unemployed due to a mismatch between their skills and the available jobs.

Unemployment caused by the cyclical ups and downs of the business cycle.

A rise in the general price level of goods and services in an economy.

Inflation caused by an increase in the demand for goods and services, often due to rising consumer spending.

Inflation caused by an increase in the cost of production, like higher wages or raw material prices.

The record of all economic transactions between a country and the rest of the world in a given period.

The part of the balance of payments that records the trade in goods, services, and income.

A situation where a country imports more goods and services than it exports, leading to a deficit in the current account.

A situation where a country exports more goods and services than it imports, leading to a surplus in the current account.

Actions taken by a central bank to manage the money supply and interest rates, influencing the overall economy.

A reduction in interest rates by the central bank, making it cheaper to borrow money, stimulating economic activity.

An increase in interest rates by the central bank, making it more expensive to borrow money, slowing down economic activity.

A policy tool used by governments to influence the economy through changes in government spending and taxation.

A decrease in taxes, leaving more money in the hands of consumers and businesses, potentially stimulating economic activity.

Government spending on goods and services, such as infrastructure, education, or healthcare, potentially boosting economic activity and creating jobs.

Policies that aim to increase the productive capacity of the economy by focusing on factors like education, infrastructure, and technology.

The exchange rate between two currencies, determined by the forces of supply and demand in the foreign exchange market.

An increase in the value of a currency relative to other currencies.

A decrease in the value of a currency relative to other currencies.

The process of increasing interconnectedness between countries through trade, investment, and cultural exchange.

The practice of producing goods or services in another country, often to take advantage of lower production costs.

The process of a developing country transitioning into a more advanced economy, often characterized by higher per capita income, improved living standards, and technological advancements.