Demand-side Policies Demand-side policies?aim to shift?aggregate demand (AD)?in an economy There are two categories of demand-side policies Fiscal policy?and?monetary policy Fiscal policy?involves ...
Economic Growth Economic growth?is a central macroeconomic aim of most governments Many developed nations (UK included) have an annual target rate of 2-3% This is considered to be?sustainable growt...
Benefits & Costs of Economic Growth Economic growth?is considered to be the main contributor to an improvement in the?standards of living Due to the?negative aspects?of economic growth, there i...
Trade (Business) Cycle A?trade (business) cycle?refers to the?changes in real GDP?that occur in an economy over time This is the actual growth The real GDP will fluctuate above and below the?long-t...
Actual Growth & Long-term Growth Actual growth?can be differentiated from the idea of?long-term trends?in growth rates A long-term growth trend is the underlying?trend rate of economic growth?o...
Causes of Economic Growth Economic growth can occur in the short-run or long-run and each is explained differently Short-run Economic Growth Changes to any of the?components of aggregate demand?(AD...
The Multiplier The multiplier ratio is the ratio of change in real income to the injection that created the change E.g. If the UK government injected an additional ￡5m into the economy through gove...
Real National Output Equilibrium Short-run Equilibrium Real national output equilibrium?occurs where?aggregate demand?intersects with?aggregate supply A diagram showing the Classical short-run equi...
Injections & Withdrawals Money?can?enter or leave?the circular flow of income in an economy Injections?add?money?into the circular flow of income and?increase its size Increased government spen...
