02-ACCA-F1-讲义-基础-PART B-Chapter 13 Macro-economic Factors.pdfVIP

Chapter 13. Macro-economic Factors 1. Define macro-economic factors Macro- economics is the study of the aggregated effects of the decisions of individual economic units (such as households or businesses). It Iinks at a complete national economy, or the international economic system as a whole. Aggregate demand The total demand in the economy for goods and services is called the aggregate demand and it is made up of several components of the circular flow. These components include consumption, investment, government spending and exports minus imports. Aggregate supply The aggregate supply refers to the ability of the economy to produce goods and services. Aggregate supply is positively related to the price level. This is because a price rise will make more profitable sales and encourage organisations to increase their output. Inflationary gap In a situation where resource are already fully employed, there may be an inflationary gap since increases in demand will cause price changes, but no variations in real output. Deflationary gap In a situation where there is unemployment of resources there is said to be a deflationary gap. The business cycle A . Recession B. Depression C. Recovery D. Boom - 52 - 2. Government policy related to macro-economic Macro-economic policy of a country (or more specifically of the Government) refers to the economic policy that was managed by the Government that affects the economy, and has the following main economic objectives: 2.1 To achieve economic growth Government tax and spending decisions have a great influence to companies. Governments spend money. Expenditure must be allocated between departments and function such as hea