Economics Terminology Flashcards
(22 cards)
What is meant by balance of trade?
the difference in value between a country’s imports and exports.
What is Interest?
Interest is the charge for the privilege of borrowing money
What is Rent?
pay recieved by someone for the use of land
What are Wages?
payment earned for labour or services
What are Commodity Prices?
Prices associated with the purchase of a commodity.
What is meant by Purchasing Power Parity?
Purchasing power parity is a way of measuring economic variables in different countries so that irrelevant exchange rate variations do not distort comparisons.
What is Income?
The flow of money coming to you
What is Wealth?
Stock of assets you have
What is Income Tax?
tax imposed on individuals or entities that varies with respective income or profits.
What are Death Duties?
(in the UK) a tax levied on property after the owner’s death
was replaced in the 90s by Inheritance Tax
What is Surtax?
an additional tax on something already taxed, especially a higher rate of tax on incomes above a certain level.
What is Aggregate Supply?
Aggregate supply shows the quantity of real GDP which is supplied at difference price levels in the economy.
What does the AD/AS Curve look like?
https://macroeconomicanalysis.com/macroeconomics-wikipedia/ad-as-model/
What are the main 4 Macroeconomic Objectives?
Economic Growth
Low + Stable Inflation
Low Unemployment
Balance of Payments Equilibrium on Current Account
What are all 7 Macroeconomic Objectives?
- Economic Growth
- Low Unemployment
- Low + Stable Inflation
- Balance of Payments Equilibrium on Current Account
- Balanced government budget
- Protection of the Environment
- Greater Income Equality
What is Capital?
Wealth, in the form of money or other assets, owned by a person or organization or available
Capital goods are used to produce consumer goods (eg machinery)
Human Capital: Investment in Education + Training of Workers
Physical Capital: Investment in Factories, Materials, etc.
What is meant by the Propensity to Consume?
Natural tendency to consume
What are Sinking Funds?
A sinking fund is a fund containing money set aside or saved to pay off a debt or bond.
What is Consumption?
- The amount Households Spend on Goods + Services to Satisfy their Current Wants
- Consumption can be for Both Durable + Non-Durable Goods
What is Investment?
The Addition to the Capital Stock of the Economy
Factories, Machines, Offices + Stocks of Materials used to Produce Other Goods + Services
When firms spend money on capital goods to increase their productive capacity
(think of it like consumption, but for firms)
What is Overproduction?
production of more of a product, commodity, or substance than is wanted or needed.
What is Fiscal Policy?
Fiscal policy involves the use of Government Spending and Taxation to influence the pattern of the economy
