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Economics interview Semester 2
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Economics interview Semester 2

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    Economics interview Semester 2 Economics interview Semester 2 Presentation Transcript

    • Economics Definitions/Diagrams
      Yeong-Se Chang
      Mr. Economist
    • Section 2 Market Failure
    • Positive Externalities- Third Parties benefit from the production or consumption of goods and services
      Real World Example: Medicine
      Negative Externalities- Third parties bear spillover costs of the production or consumption of goods and services.
      Real World Example: Substances like alcohol, tobacco, etc
    • Negative Production Externalities
    • Negative Consumption Externality
    • Positive Production Externality
    • Positive Consumption Externality
    • Section 3: Macroeconomics
    • Gross Domestic Product: is the total money value of all final goods and services produced in an economy in one year.
      Gross National Product: is the total money value of all final goods and services produced in an economy in one year, plus net property income from abroad.
      Nominal GDP: not adjusted for inflation
      Real GDP: adjusted for inflation
    • Per Capita GDP: is the total money value of all final goods and services produced in an economy in one year per head of the population.
      Aggregate Demand: is the total spending in an economy consisting of consumption, investment, government expenditure and net exports
      Consumption: is spending by households on consumer goods and services over a period of time.
      Real world example: eating dinner outside everyday
    • Inflationary Gap: is the situation where total spending is greater than the full employment level of output, thus causing inflation
    • Deflationary Gap: is the situation where total spending is less than the full employment level of output, thus causing unemployment.
    • Demand-side policies: are any government policies designed to influence AD in the economy, thus affecting the average price level and real national output.
      Real World Example: Tax on income
      Fiscal Policy: is a policy using changes in government spending and/or direct taxation to achieve economic objectives. (Increase spending on education)
      Monetary Policy: is a policy using changes in money supply or interest rates to achieve economic objectives. (raising borrowing cost)
    • Aggregate Supply: is the total amount of domestic goods and services supplied by business and the government, including both consumer goods and capital goods.
      Supply-side policies: are government policies designed to shift the LRAS curve to the right, thus increasing potential output in the economy.
      Real World Example: increasing subsidies
    • Multiplier: is the ratio of a change in the level of national income to an initial change in one or more of the injections into the circular flow of income
      Accelerator: is the relationship between the level of induced investment and the rate of change of national income
      Crowding out: is the situation where the government spends more than it receives in revenue (Greece)
    • Unemployment: is a situation that exists when people who are willing and able to work cannot get a job.
      Full Employment: exists when the number of jobs available in an economy is equal to or greater than the number of the people actively seeking work.
      Underemployment: exists when workers are carrying out jobs for which they are over-qualified, not using their full skills or part time
    • Unemployment Rate: is the number of unemployed workers expressed as a percentage of the total workforce.
      Real World Example: Korea has 3.4%
      Structural Unemployment: is when in the long term, the pattern of demand and production methods change and there is a permanent fall in the demand for a particular type of labor.
      Frictional Unemployment: is unemployment that exists when people have left a job and are in the process of searching
    • Seasonal Unemployment: is unemployment that exists when people are out of work because their usual job is out of season
      Real World Example: Ski Instructor in Summer.
      Inflation: is a sustained increase in the general level of prices and a fall in the value of money
    • Demand-pull Inflation: is inflation that is caused by increasing AD in an economy that shifts the AD curve to the right
    • Cost-push Inflation: is inflation that is caused by an increase in the costs of production in an economy that shifts the SRAS curve to the left.
    • Deflation: is a persistent fall in the average level of prices in an economy
      Real World Example: Deflation in Japan slowing its economy.
    • Phillips Curve: is a curve showing the inverse relationship between the rate of unemployment and the rate of inflation, which suggests a trade-off between inflation and unemployment (short-run). In the long run, it shows the neo-classical view that there is no trade-off between inflation and unemployment in the long run and that there exists a natural rate of unemployment that can only be affected by supply-side policies.