| A | B |
|---|
| Rate of economic growth | The percentage increase in output over a 12 month period. |
| Rate of inflation | The percentage increase in prices over a 12 month period. |
| Balance of Payments | A record of the country’s transactions with the rest of the world. |
| Exchange rate | The rate at which one national currency exchanges for another. |
| Aggregate demand | Total spending on goods and services made in the economy. |
| Consumption | The direct flow of money payments from households to firms. |
| Withdrawals (leakages) | Incomes of households or firms that are not passed on round the inner flow. |
| Transfer payments | Moneys transferred from one person or group to another without production taking place. |
| Injections | Expenditure on the production of domestic firms from outside of the inner flow. |
| Actual growth | The percentage annual increase in the capacity of the economy to produce. |
| Potential output | The output that could be produced in the economy if there was full employment of resources. |
| Business cycle (trade cycle) | The periodic fluctuations of national output round its long-term trend. |
| Number unemployed | Those of working age who are without work but who are available for work at current wage rates. |
| Labour force | The number employed plus the number unemployed. |
| Unemployment rate | The number unemployed expressed as a percentage of the labour force. |
| Claimant unemployment | Those in receipt of unemployment-related benefits. |
| Standardised unemployment rate | The measure of the unemployment rate used by the ILO. |
| Aggregate supply of labour curve | This shows the total number of people willing and able to work at different average real wage rates. |
| Aggregate demand for labour curve | This shows the total demand for labour in the economy at different average real wage rates. |
| Disequilibrium unemployment | Unemployment resulting from real wages in the economy being above the equilibrium level. |
| Equilibrium (‘natural’) unemployment | The difference between those who would like employment at the current wage rate and those willing and able to take a job. |
| Real-wage unemployment | Disequilibrium unemployment caused by real wages being driven up above the market-clearing level. |
| Demand-deficient (or cyclical) unemployment | Disequilibrium unemployment caused by a fall in aggregate demand with no corresponding fall in the real wage rate. |
| Frictional (or search) unemployment | Unemployment that occurs as a result of imperfect information in the labour market. It often takes time for workers to find jobs. |
| Structural unemployment | Unemployment that arises from changes in the pattern of demand or supply in the economy. People made redundant in one part of the economy cannot immediately take up jobs in other parts (even though there are vacancies). |
| Technological unemployment | Structural unemployment that occurs as a result of the introduction of labour-saving technology. |
| Regional unemployment | Structural unemployment occurring in specific regions of the country. |
| Seasonal unemployment | Unemployment associated with industries or regions where the demand for labour is lower at certain times of the year. |
| Real growth values | Values of the rate of growth of GDP or any other variable after taking inflation into account. The real value of the growth equals its growth in money (or ‘nominal’) value minus the rate of inflation. |
| Demand-pull inflation | Inflation caused by persistent rises in aggregate demand. |
| Cost-push inflation | Inflation caused by persistent rises in costs of production (independently of demand). |
| Gross value added (GVA) at basic prices | The sum of all the values added by all industries in the economy over a year. The figures exclude taxes on products (such as VAT) and include subsidies on products. |
| Gross domestic product (GDP) (at market prices) | The value of output produced within a country over a 12-month period in terms of the prices actually paid. |
| Gross National Income (GNY) | GDP plus net income from abroad. |
| Depreciation | The decline in value of capital equipment due to age or wear and tear. |
| Net national income (NNY) | GNY minus depreciation |
| Households’ disposable income | The income available for households to spend: i.e. personal incomes after deducting taxes on incomes and adding benefits. |
