Macro — GDP, inflation, RBA on one page

VCE Economics · Macro essentials · 6 flashcards, free to study.

Core macro indicators and policy tools. Definitions VCAA accepts verbatim.

What is GDP?

Total market value of all final goods/services produced in an economy over a period.

Inflation — definition

Sustained increase in the general price level over time.

What does the CPI measure?

Changes in the price of a fixed basket of goods/services bought by households.

Three RBA monetary policy tools

Cash rate setting, open market operations, expectations management.

Expansionary fiscal policy — example

Increased government spending or tax cuts to stimulate aggregate demand.

What is the natural rate of unemployment?

The rate consistent with stable inflation — frictional + structural unemployment.

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