1
Q
What is economic growth?
A
The increase in potential level of output within the economy over a period of time
2
Q
What is the economic cycle?
A
Upswing and downside in aggregate economic activity taking place over 4-12 years
3
Q
What is unemployment?
A
When not all of those who are able and willing to work are employed
4
Q
What is the accelerator effect?
A
The increase in income leads to a greater than proportional increase in investment
5
Q
What is the multiplier effect?
A
If there is an initial injection (investment, government spending, exports) causing an increase in ad and national income
6
Q
What is inflation?
A
A persistent rise in the average price level
Econ AS
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