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Economics > Econ > Flashcards

Econ Flashcards

1
Q

current government expenditure

A

money spent by the government on the day to day running of the government.

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2
Q

Disrectionary government expenditure

A

money spent by the government over which it has choice and it is easy to change how much it spends

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3
Q

GNP at market price

A

Gross national product at market prices = GDP + income earned abroad - income paid to foreigners

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4
Q

GVA

A

Gross value added = GDP - indirect taxes - subsidies

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5
Q

Irrational behaviour

A

A situation in which a decision maker makes a decision that is not influenced by the desire to maximise there own self interest

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6
Q

Marginal social benefit

A

The total extra benefits of producing an extra unit of a product = marginal private cost + marginal external cost.

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7
Q

composite demand

A

when goods and services have more than one use so that an increase in demand for one product will lead to a reduction in the supply of the other product

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8
Q

Giffen good

A

A product with a demand curve that is upward sloping from left to right because of the effect of a price increase reducing real income means that consumers buy fewer other products in order to buy the more expensive ones so that the income effect is greater than the effect of higher prices on swapping between products.

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9
Q

Market segment

A

groups of consumers within a market who have similar wants and desires.

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10
Q

company

A

A business that is owned by shareholders

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11
Q

going public

A

converting the ownership of a business to become a public limited company

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12
Q

Multi-national corporation

A

Large conglomerates, often with a big mix of products, which operate in many countries

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13
Q

Mutual organisation

A

a business organisation that does not have owners in the normal sense of the word owners. It has members who collectively own the business and are also its customers.

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14
Q

Ordinary shares

A

Part ownership of a limited liability business that has voting rights which entitles its holder to dividends

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15
Q

Partnership

A

A form of business ownership that involves between two and twenty people owning and running the business. They have unlimited liability .

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16
Q

Private limited company

A

a firm who’s financial liabilities are limited to the amount of money put up by shareholders. One person alone can form one and its shares cannot be sold to the public.

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17
Q

Public limited company

A

a limited company who’s shares can be bought and sold by the public and other firms and can use the abbreviation plc.

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18
Q

Share

A

A part ownership of a business that has limited liability.

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19
Q

Shareholder

A

people or businesses who have bought shares in a company which gives them part ownership of the company and a percentage of any profits

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20
Q

Sole trader

A

A form of business ownership that is owned and run by one person.

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21
Q

Average family

A

a theoretical idea of the characteristics of the typical household in the economy, which is used to help measure the rate of inflation.

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22
Q

Basket of goods

A

The combination of goods and services that is used to measure the rate of inflation in an economy.

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23
Q

Benign deflation

A

A rate of price deflation that is low enough not to be considered harmful to the economy or that is only temporary.

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24
Q

Boom

A

A phase of the economic cycle where the economy is at its peak level of GDP. The economy is at or near full capacity

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25
Q

Claimant count

A

a measure of unemployment that includes only those people that are receiving unemployment benefits because they are available for work and actively seeking work.

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26
Q

cost push inflation

A

where an increase in the general level of prices is caused by the costs of businesses going up, forcing firms to increase their prices.

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27
Q

CPI

A

The consumer price index - A way of measuring the rate of inflation which measures changes in prices of a basket of goods.

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28
Q

HDI

A

Human development index. This is a way that measures standard of living that takes into account a wider set of factors.

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29
Q

hysteresis

A

A situation where low, high and extended period of unemployment alters the skills that people have so that they become less employable over time, increasing the natural rate of unemployment

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30
Q

ILO

A

International labour organisation. This is a body that sets the standard for how market research can be used to record the level of unemployment in an economy

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31
Q

index of sustainable welfare

A

this is a way of measuring the standard of living that takes into account a wider set of factors than the HDI

32
Q

long run Philips curve

A

this is a vertical line that represents the rate of unemployment that is consistent with the rate of d
inflation

33
Q

malign deflation

A

A rate of deflation that is considered to be bad for the economy as a whole because it causes even more deflation

34
Q

money income

A

the nominal value of a person of an economies income

35
Q

natural rate of unemployment

A

the rate of unemployment when the labour market is in equilibrium

36
Q

negative output gap

A

when the economy is growing more slowly than the trend rate of growth

37
Q

participation rates

A

the % of the population that are active in the labour market

38
Q

real national output

A

the value of national income, which is the value of all output in the economy. which has been adjusted to take into account the changes in price

39
Q

real wage unemployment

A

the people who are out of a job because the actual real wage is higher than the equilibrium real wage rate

40
Q

current account

A

the difference between the flows of money into a country and the flows of money out of a country for trade in goods, services and income abroad. = visible balance + invisible balance + primary income + secondary income

41
Q

Economic cycle

A

regular changes in the level of economic activity, moving from booms to recessions and back again

42
Q

endogenous

A

an influence on the performance of an economy that comes from within the economy

43
Q

equity

A

A judgment about the fairness of a situation

44
Q

exogenous

A

An influence on then performance of an economy that comes from outside of the economy

45
Q

frictional unemployment

A

the employment that exists due to. people being in the process of moving between jobs

46
Q

GDP at market prices

A

the value of all goods and services produced in an economy plus taxes, less subsidies in imports

47
Q

GDP per capita at purchasing power party

A

GDP converted into international dollars using purchasing power parity exchange rates and divided by total population.

48
Q

government dept

A

the total value of all borrowing made by the government that has not yet been paid back.

49
Q

Liquidity trap

A

A situation where interest rates are so low that further cutting interest rates no longer have any affect on the real economy

50
Q

Market based policies

A

government actions that are designed to improve markets so they can more effectively solve economic issues themselves

51
Q

monetary based control

A

attempting to limit the amount of liquid currency

52
Q

monetary policy committee

A

a group based in the bank of England who’s function is to set bank rate

53
Q

monetary transmission mechanism

A

the process by which changes in monetary policy affect the real economy

53
Q

narrow money

A

something that takes a form that means it can be used as a medium of exchange

54
Q

national insurance contributions

A

A tax that is paid and hypothecated for use as welfare benefits

55
Q

near money

A

assets than can be easily converted into cash

56
Q

open market contributions

A

the process of buying and selling government dept with the intention of expanding or contracting the money supply

57
Q

proportional taxation

A

whatever you income/wealth you pay the same percentage of your wealth/income

58
Q

PSNCR

A

Public sector net credit requirement - the official measure of the government budget deficit

59
Q

QUANGO

A

quasi-autonomous non government organisation - these are government funded bodies, that are not controlled by the government, set up to regulate specific firms or industries

60
Q

quantitive easing

A

where the central bank deliberatly increases the supply of money in an economy

61
Q

regressive taxation

A

where the percentage of your income paid in tax decreases as income increases

62
Q

sight deposit accounts

A

a bank account where the money can be withdrawn with no notice

63
Q

stamp duty

A

a tax on the sale of houses

64
Q

standard of deferred payment

A

a characteristic of money - meaning that something is a widely accepted way to value dept and so allowing goods and services to be acquired now and paid for in the future.

65
Q

trickle down effect

A

the idea that wealth created for the richest people is saved or spent and so either creates demand for other businesses or provides the funding for investment that allows the rest of society to indiretly benefit from that wealth

66
Q

unit of account

A

A characteristic of money - it is a measure of money that is used to value any economic item

66
Q

velocity of circulation of money

A

the number of times that the supply of money moves around in an economy in a given period of time

67
Q

business rates

A

a tax paid to the local council by businesses based on the value of the premises

68
Q

certain taxation

A

taxes that are predicable so that you can plan for how you are going to pay them

69
Q

incidence of taxation

A

the extent to which a tax is paid by consumers compared to being paid by producers

70
Q

national insurance contributions (NICs)

A

a tax paid on the money that you earn and paid by the businesses that employ you. Sole traders also have to pay it.

71
Q

nationalisation

A

where the government buys an industry or other assets from the private sector in order to achieve its economic objectives

72
Q

regulatory capture

A

where a government body that was formed to protect consumers ends up protecting the firm instead

73
Q

VAT

A

A tax on the value of things that are sold, it is paid by the businesses to the government

74
Q

abnormal profit

A

the profit of a business that is more than the opportunity cost to them of staying in the industry

75
Q

accounting profit

A

the profit published by businesses for tax purposes, calculated by subtracting total costs from total revenues

Economics (6 decks)

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