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Edexcel A Level Economics > Theme 2 > Flashcards

Theme 2 Flashcards

(92 cards)

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1
Q

Actual Growth

A

Economic growth measured by changes in real GDP

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2
Q

Aggregate demand

A

The total level of demand in an economy at any given price level at any given moment in time

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3
Q

Aggregate supply

A

The total amount of output n an economy at any given price ar any given moment in time

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4
Q

Animal spirits

A

The level of confidence of business owners

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5
Q

Balance of payments

A

A record of all financial dealings over a period of time between economic agents of one country and all other countries

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6
Q

Base year

A

A year chosen as a good comparison in a series of data when building an index; it is automatically given an index figure of 100

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7
Q

Boom

A

The peak of the business cycle, when growth is high

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8
Q

Budget

A

Where the government lays out its spending and taxation plans

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9
Q

Budget deficit

A

When the government spends more money than it receives

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10
Q

Budget surplus

A

When the government receives more money than it spends

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11
Q

Circular flow

A

A model of the economy which shows the flow of goods and services, the factors of production and money around the economy

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12
Q

Claimant count

A

A measure of unemployment: the number of people receiving benefits for being unemployed

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13
Q

Consumer price index

A

Official measure used to calculate the rate of inflation, using a weighted basket of goods

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14
Q

Consumption

A

Consumer spending on goods and services

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15
Q

Current account

A

A record of the payments for the purchase and sale of goods and services as well as income and transfers

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16
Q

Current account deficit

A

When more money leaves the country than enters, so the current account is negative

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17
Q

Current account surplus

A

When more money enters the country than leaves, so the current account is positive

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18
Q

Cyclical unemployment

A

Unemployment caused by a lack of AD

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19
Q

Deflation

A

A persistent fall in the prices of goods and services

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20
Q

Deflationary/contractionary policy

A

Fiscal or monetary policy which is aimed at reducing AD

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21
Q

Demand-pull inflation

A

Inflation caused by an increase in AD

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22
Q

Depreciation

A

The reduction in the value of machinery overtime

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23
Q

Direct tax

A

Taxes paid straight to the government by the individual taxpayer

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24
Q

Disinflation

A

A reduction in the rate of inflation

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25
Disposable income
The money consumers have left to spend, after taxes have been taken away and benefits added
26
Economic growth
An increase in the long term productive potential of the economy; an increase in the amount of goods and services which are produced, measure by an increase in real GDP
27
Employed
Those in the labour force that have a job
28
Expansionary policy
Fiscal or monetary policy which is aimed at increasing AD
29
Export-led growth
Economic growth arising from an increase in exports
30
Fiscal policy
The use of borrowing, government spending and taxation to manipulate the level of AD and improve macroeconomic performance
31
Frictional unemployment
unemployment caused when people move between jobs and enter the job market
32
Gross domestic product
The value of goods and services produced in a country over a given period of time
33
GDP per capita
Total GDP divided by the population
34
Gross investment
Investment both to replace old machinery that has depreciated and to create/buy new ones
35
Gross National Income
The value of goods and services produced by a country over a period of time plus ner overseas interest payments and dividends
36
Gross national product
The value of goods and services produced by citizens of a country whether they live in the country or not
37
Government spending
Spending by the government on the provision of goods and services
38
Imports
Goods and services bought from foreigners that takes income out of the country
39
Inactive
Those neither employed nor unemployed; those not participating in the job market
40
Income
A flow of assets
41
Index number
Numbers allowing accurate comparisons to be made over time. The base year value is typically 100
42
Indirect tax
Tax where the person charged with paying the money to the government is able to pass the cost onto someone else
43
Inflation
The general rise in prices of goods and services that erodes the purchasing power of moeny
44
Injection
Spending power entering the circular flow of income resulting from investment, government spending and exports
45
Interventionist supply-side policies
Policies designed to correct market failure, where the government intervenes in the market
46
Investment
Spending by businesses on capital goods, which leads to the creation of real goods
47
Labour force survey
A measure of unemployment
48
Living standards
The quality of life enjoyed by people in a country
49
Long run
When all factors of production are variable
50
Long run aggregate supply
The total output an economy can produce when operating at full output
51
Long run trend rate of growth
The average sustainable rate of economic growth over a period of time
52
Marginal propensity to consume
The proportion of an increase in income spent on consumption
53
Marginal propensity to import
The proportion of an increase in income spent on imports
54
Marginal propensity to save
The proportion of an increase in income that is saved
55
Marginal propensity to tax
The proportion of an increase in income that is taken away in tax
56
Marginal propensity to withdraw
The proportion of an increase in income that is withdrawn from the circular flow
57
Market-based supply-side policies
Policies which are designed to remove anything which prevents the free market system working efficiently
58
Monetary policy
The attempts of the central bank authority to control the level of AD by altering base interest rates or the amount of money in the economy
59
Monetary policy committee
9 economists who meet monthly to set the BAnk rate as well as other monetary instruments
60
Monetary supply
Stock of money in the economy
61
Multiplier
An increase in injection will lead to an even grate increase in national income
62
National expenditure
The value of spending by households on goods and services
63
National income
The value of money paid by firms to households in return for land, labour, capital and enterprise
64
National output
The value of the flow of goods and services from firms to households
65
Negative output gap
When GDP is lower than predicted; the economy is producing below full output
66
Net exports
Exports minus imports
67
Net investment
Investment adjusted for depreciation; gross investment minus depreciation
68
Nominal GDP
Gdp which does not take inlfation into account; GDP at current prices
69
Output gap
The difference between the long term trend of growth and actual growth
70
Positive output gap
When GDP is higher than predicted; the economy is producing above full output
71
Potential growth
A change in the productive potential of the economy
72
Purchasing power parity
Exchange rate of one currency to another that compares the cost of living in different countries through comparing a typical basket of goods
73
Quantitative easing
When the central bank buys assets in exchange for money in an attempt to increase the money supply
74
Real GDP
GDP adjuested for inflation
75
Real wage unemployment
Unemployment caused when wages are set above the equilibrium wage rate
76
Recession
The trough of the business cycle, when growth is low. It is where GDP falls in at least two successive quarters
77
Retail price index
An old measure of inflation which has lost its national statistic status
78
Savings
The decision by the consumer to postpone consumption
79
Seasonal unemployment
Unemployment caused when an industry only operates during certain times of the year
80
Short run
When at least one factor of production is fixed
81
Short run aggregate supply
Aggregate supply when at least one factor of production is fixed
82
Short run Philips curve
Shows the relationship between unemployment and inflation: higher levels of unemployment lead to lower levels of inflation
83
Structural unemployment
Unemployment caused by the long term decline of an industry
84
Supply-side policies
Government policies aimed at increasing the productive potential of the economy and shifting LRAS to the right
85
Total GDP
The GDP of the while country
86
Trade (business) cycle
The tendency of economic growth to rise and fall above and below the trench rate of economic growth, causing booms and busts
87
Underemployment
Those who are working but are not working the amount of hours they would like or those employed below their skill level
88
Unemployed
Those who are without work
89
Value of GDP
Nominal values of GDP; GDP at current prices
90
Volume of GDP
Real values of GDP; the size of the basket of goods
91
Wealth
A stock of assets
92
Withdrawal
Spending power leaving the circular flow of income resulting from savings, taxation and imports.

Edexcel A Level Economics (5 decks)

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