Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

EDEXCEL IGCSE Economics 2024 > 2.1 Government and the Economy > Flashcards

2.1 Government and the Economy Flashcards

1
Q

Budget deficit

A

amount by which government spending is greater than government revenue.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Macroeconomics

A

study of large economic systems such as: the whole country / area of the world.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Microeconomics

A

study of small economic systems, part of national or international systems.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Economic growth

A

increase level of output by a nation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

National income

A

value of income, outputs or expenditure over a period of time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Gross domestic product (GDP)

A

market value of all final goods and services produced in a period (yearly), internationally recognised measure of national income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Boom

A

peak of the economic cycle where GDP is growing at its fastest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Downturn

A

period in the economic cycle where GDP grows, but more slowly.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Recession

A

period of temporary economic decline during which trade and industrial activity are reduced, fall of GDP in two successive quarters.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Depression

A

bottom of the economic cycle where GDP starts to fall with significant increase in unemployment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Recovery (upswing)

A

GDP starts to rise again.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Overheat

A

demand rises too fast, causes prices and imports to rise, situation that governments correct by raising taxes and interest rates.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Unsustainable growth

A

economic growth not possible to sustain without causing environmental problems.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Aggregate demand

A

total demand in the economy (include consumption, investment, government expenditure, exports minus imports)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Deflation

A

period where level of aggregate demand falls.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Inflation

A

rate at which prices rise, general and continuing rise in prices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Consumer price index (CPI)

A

measure of the general price level (- housing costs)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Retail price index (RPI)

A

measure of the general price level (+ house prices & council tax)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Demand-pull inflation

A

inflation caused by too much demand relative to supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Cost-push inflation

A

inflation caused by rising business costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Interest rates

A

price paid to lenders for borrowed money; price of money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Monetarists

A

economists believe there’s a (strong) link between growth in money supply & inflation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Purchasing power of money

A

amount of goods & services bought with a fixed sum of money.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Menu costs

A

costs to firms having to make repeated price changes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Shoe leather costs

A

costs to firms & consumers searching for new suppliers when inflation is high

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Hyperinflation

A

very high levels of inflation; rising prices get out of control.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Unemployment

A

when those actively seeking work are unable to find a job

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Cyclical or Demand deficit unemployment

A

unemployment caused by falling demand as a result of a downturn in the economic cycle.

29
Q

Laying off

A

stop employing someone because there is no work for them to do

30
Q

Structural unemployment

A

unemployment caused by changes in the structure of the economy (decline in an industry).

31
Q

Seasonal unemployment

A

unemployment caused when seasonal workers, such as those in the holiday industry, are laid off because the season has ended.

32
Q

Voluntary unemployment

A

unemployment resulting from people choosing not to work.
People choose not to work for the wages offered or do not like the idea of work in general.

33
Q

Frictional unemployment

A

when workers are unemployed for a short period of time as they move from one job to another

34
Q

Balance of payment

A

record of all transactions relating to international trade

35
Q

Exports

A

goods and services sold overseas

36
Q

Imports

A

goods and services bought from overseas

37
Q

Current account

A

part of the balance of payments where all exports & imports recorded.

38
Q

Capital and financial account

A

part of balance of payments where flows of saving, investment and currencies are recorded

39
Q

Current balance

A

difference between total exports and total imports (visible and invisible)

40
Q

Current account deficit

A

when value of imports exceeds the value of exports.

41
Q

Current account surplus

A

when value of exports exceeds the value of imports.

42
Q

Visible trade

A

trade in physical goods (buying and selling physical goods).

43
Q

Balance of trade (visible balance)

A

difference between visible exports and visible imports.

44
Q

Invisible trade

A

trade in services

45
Q

Primary income

A

money received from the loan of production factors abroad.

46
Q

Secondary income

A

government transfers to and from overseas agencies such as the EU.

47
Q

Income inequality

A

differences in income that exist between the different groups of earners in society, that is, the gap between the rich and the poor.

48
Q

Lorenz curve

A

graphical representation of the degree of income or wealth inequality in a county.

49
Q

Absolute poverty

A

where people do not have enough resources to meet their basic human needs.

50
Q

Relative poverty

A

poverty that’s defined relative to existing living standards for the average individual.

51
Q

Progressive taxation

A

where the proportion of income paid in tax rises as the income of the taxpayer rises.

52
Q

Regressive taxation

A

tax system that places the burden of the tax more heavily on the poor.

53
Q

Policy instruments

A

tools governments use to implement their policies, such as interest rates, rates of taxation, levels of government spending.

54
Q

Fiscal policy

A

decisions about government spending, taxation and levels of borrowing that affect aggregate demand in the economy.

55
Q

Budget

A

government’s spending and revenue plans for the next year.

56
Q

Direct taxes

A

taxes levied on the income earned by firms and individuals.

57
Q

Indirect taxes

A

taxes levied on spending, such as VAT.

58
Q

Value-added tax

A

tax on some goods and services, businesses pay value-added tax on most goods and services they buy and if they are VAT a registered, charged value-added tax on the goods and services they sell.

59
Q

Fiscal deficits

A

amount by which government spending exceeds government revenue.

60
Q

Fiscal surplus

A

amount by which government revenue exceeds government spending.

61
Q

Expansionary fiscal policy

A

fiscal measures designed to stimulate demand in the economy

62
Q

Contractionary fiscal policy

A

fiscal measures designed to reduce demand in the economy

63
Q

Monetary policy

A

use of interest rates and the money supply to control aggregate demand in the economy.

64
Q

Mortagage

A

legal arrangement where you borrow money from a financial institution in order to buy land or a house, and you pay back the money over a period of years; if you do not make your regular payments, the lender normally has the right to take the property and sell it in order to get back their money

65
Q

Base rate

A

rate of interest set by government or regional central banks for lending to other banks, which in turn influences all other rates in the economy

66
Q

Quantitative easing

A

buying of financial assets, such as government bonds from commercial banks which results in a flow of money from the central bank to commercial banks.

67
Q

Supply side policy

A

government measures designed to increase aggregate supply in the economy.

68
Q

Aggregate supply

A

total amount of goods and services produced in a country at a given price level in a given time period.

EDEXCEL IGCSE Economics 2024 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions