A
Name the three factors of macroeconomics.
Unemployment
Inflation
GDP
True or false: A budget deficit happens when government spending is bigger than its tax income.
True.
Name the 4 components of GDP.
Consumption
Investments
Government Spending
Net Exports (Imports-Exports)
What is Monetary policy?
Monetary policy is a set of tools used by nation's central bank to control money flow.
What is meant by an “Advanced Economy” in IMF statistics from the presentation?
A high-income, highly industrialised country with well-developed financial markets (e.g., US, Germany, Japan)
What is meant by “developing country”?
A country that is still growing and getting richer
What are the four things needed to be considered unemployed?
Looking for a job.
Able to work.
Of working age.
Unemployed.
Which part of GDP (C + I + G + NX) becomes bigger if the government launches a road-building program?
G – Government spending.
How does monetary policy affect wealth?
Monetary policy movements affect interest rates, which in turn affect the value of household assets
Name three types of inflation.
Cost-Push Inflation
Demand Inflation
Printing Money
Why do high interest rates lower inflation?
They make loans and spending more expensive
Why do economists compare GDP per capita, not just total GDP?
It adjusts for population size and better reflects living standards.
What causes GDP to have expansion?
Significant spending increases GDP causing an expansion.
From this list sort what is or is not part of the GDP.
Your parents sell your childhood home
Getting wine from Italy
Selling a dresser on Facebook MarketPlace
Buying weapons for the army
Getting a tired fixed
A carpenter is buying wood to make a chair that is going to be later sold.
Why is full employment not the same as 0% unemployment?
Because some frictional and structural unemployment always exists.
Calculate the interest burden: if Uzbekistan’s debt is 33 % of GDP and average interest rate is 4 %, interest payments equal what percent of GDP?
0.04 × 0.33 ≈ 1.3 % of GDP.
What type of inflation is caused by higher utility or oil prices?
Cost-push inflation – caused by rising input costs, not excess demand.
if national currency weakens against the dollar, do import/export become expensive or cheaper?
National currency loses value—imports become more expensive, exports become cheaper.
Why do central banks often aim for 2% inflation instead of 0%?
A little inflation encourages spending and allows wage flexibility; 0% risks deflation.
If Uzbekistan cuts energy subsidies, why might inflation rise temporarily?
Prices for gas/electricity rise, causing direct price increases and indirect cost pass-through to other goods.
What happens to output and interest rates if government spending rises in the IS-LM model (closed economy, fixed money supply)?
Output and interest rates both increase.
A country’s inflation rate is 9%, and its central bank wants to bring it down to 5%. What monetary policy action is appropriate?
The central bank should raise interest rates (tighten monetary policy) to reduce spending, which will ease demand-pull inflation.
A 10 % decrease in gold prices hits Uzbekistan’s exports. In the AD–AS model, where does AD curve shifts to?
AD shifts left (lower export revenue).
If the Central Bank of Uzbekistan raises interest rates, what is one of two expected short-run effects?
1) Slower inflation, (2) Slower credit and GDP growth (monetary tightening).
A country has a growing current account deficit and a depreciating currency. Compare Import & Export? More capital outflows or inflows?
Imports exceed exports, causing capital outflows.