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AS Economics key terms

Joshua Burrows Economics A Level Englisch 5,0Durchschnittliche Bewertung 5,0 von 5 (1 Bewertung) 128 Karten

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  1. 1Accelerator effectThe relation between the change in new investment and the rate of change of national income
  2. 2Actual supplyThe amount that producers in fact produce. This may differ from planner supply for a variety of reasons such as breakdowns in production, staff absences, etc
  3. 3Aggregate demandTotal planned expenditure in the economy. Known as C+I+G+(X-M)
  4. 4Aggregate supplyThe total value of goods and services supplied in the economy
  5. 5Balance of paymentsExports minus imports - a deficit means more is imported than exported
  6. 6Balance of tradeVisible exports minus visible imports
  7. 7Balanced budgetWhere government receipts equal government spending in a financial year
  8. 8Budget deficitWhere government spending exceeds government receipts in a financial year
  9. 9Budget surplusWhere government receipts exceed government spending in a financial year
  10. 10Buffer stockAn intervention system that aims to limit the fluctuations of the price of a commodity
  11. 11Capital spendingGovernment spending to improve the productive capacity of the nation, including infrastructure, schools, and hospitals
  12. 12CommodityA good that is traded, but usually refers to raw materials or semi-manufactured goods that are traded in bulk such as tea iron ore, oil, or wheat. Often unbranded.
  13. 13CompetitionA market situation in which there are a large number of buyers and sellers
  14. 14Complementary goodsGoods that are consumed together, for example, bread and butter, or DVDs and DVD players
  15. 15Complete market failureWhere the free market fails to provide a product at all, i.e. the case of public goods
  16. 16Composite demandA good that is demanded for more than one purpose so that an increase in demand for one purpose reduces the available supply for the other purpose, typically leading to higher prices, e.g. milk used in butter and cheese
  17. 17Contractionary fiscal policyIncreasing levels of tax revenue relative to government spending, appropriate during a boom in economic activity
  18. 18Cost push inflationWhere increased costs of production result in firms increasing their prices leading to an increase in the general price level
  19. 19CPI (Consumer Price Index)A measure of the price level used widely in the Eurozone. Used since 2004 as the target measure for inflation by the government and MPC
  20. 20Credit crunchWhere borrowing becomes more expensive or unavalible
  21. 21Current account equilibriumWhere the current account exercises no effect on the domestic macroeconomy
  22. 22Cyclical unemploymentDemand deficient unemployment that occurs as a result of the economic cycle
  23. 23DeflationA situation where prices persistently fall
  24. 24DeindustrialisationA fall in the proportion of national output account for by the manufacturing sector of the economy
  25. 25DemandThe amount that consumers are willing and able to buy at each given price level
  26. 26Demand deficient unemploymentInsufficient AD in the economy to employ the available labour
  27. 27Demand pull inflationWhere AD exceeds AS leading to an increase in the level of prices
  28. 28Demand-side fiscal policyChanges in the level or structure of government spending and taxation aimed at influencing one or more of the components of AD
  29. 29Demerit goodA good that would be over-consumer in the free market, as it brings less overall benefit to consumers than they realise
  30. 30DeregulationThe process of removing government controls from markets
  31. 31Derived demandWhen the demand for one good or service comes from the demand for another good or service. The demand for cars stimulates the demand for steel, therefore the demand for steel is derived demand
  32. 32Discretionary fiscal policyThe deliberate manipulation of government spending and taxation to influence the economy
  33. 33Diseconomies of scaleWhere an increase in the scale of production leads to increases in average total costs for firms
  34. 34DisequilibriumA situation within the market where supply does not equal demand
  35. 35Disposable incomeIncome available to households after the payment of income tax and national insurance contribution
  36. 36Division of labourBreaking the production process down into a sequence of tasks, with workers assigned to particular tasks
  37. 37Economic goodsGoods that are scarce and therefore have an opportunity cost
  38. 38Economic growthThe capacity of the economy to produce more goods and services over time
  39. 39Economic welfareRefers to the benefit or satisfaction an individual or society gets from the allocation of resources. We can attempt the measure the welfare of individuals but really we want to understand the overall effects on society as a whole - hard to define
  40. 40Economies of scaleWhere an increase in the scale of production leads to reductions in average total costs for firms
  41. 41Effective demandDemand supported by the ability to pay for a good or service
  42. 42Excess demandWhen demand is greater than supply at a given price
  43. 43Excess supplyWhen supply at a particular price is greater than demand, this should signal to producers to lower prices
  44. 44Exchange rateThe price at which one currency, e.g. the pound, exchanges for another, e.g. the US dollar
  45. 45Expansionary fiscal policyIncreasing levels of government spending relative to tax revenue, appropriate to stimulation AD during a downturn in economic activity
  46. 46ExportingThe sale of goods or services to a foreign country - generates income for the home country
  47. 47ExternalitiesCosts or benefits that spill over to third parties external to a market transaction
  48. 48Factor marketThe market for the factors of production that make other goods and services such a labour or raw materials
  49. 49Information failureWhere economics agents do not properly perceive the benefits or disadvantages of a trasaction
  50. 50Fiscal policyThe policy of the government regard taxation and government expenditure
  51. 51Fixed costsCost of production that do not vary as output changes
  52. 52Free goodsGood that have no opportunity cost
  53. 53Free-market economyOne in which there is very limited government involvement in providing goods and services. its main role is to ensure that the rules of the market are fair so that, for example, people cannot steal each other's property
  54. 54Free-rider problemWhere some consumers benefit from other consumers purchasing a good, particularity in the case of public goods
  55. 55Frictional employmentPeople between jobs
  56. 56GDP per capitaGDP divided by the population - a measure of living standards
  57. 57Geographical immobilityWhere workers find it difficult to move to where employment opportunities may be, due to family ties and differences in housing costs
  58. 58GlobalisationThe ability to produce goods anywhere in the world and sell them in any country
  59. 59Goods and servicesGoods are considered to be tangible products that we can touch such as CDs or a car. These are distinct from services which are not tangible such as a trip to the cinema
  60. 60Government failureWhen government intervention to correct market failure does not improve the allocation of resources or leads to worsening of the situation. The costs of government intervention may therefore exceed the benefits
  61. 61GDPThe total value of goods and services produced in the economy
  62. 62Hot moneyMoney that is liable to rapid transfer from one country to another
  63. 63Human capitalThe skills, abilities, motivation, and knowledge of labour. Improvements in human capital raise productivity and can shift the PPB to the right
  64. 64ImportingThe purchase of goods and services from abroad - leads to expenditure for the home country
  65. 65Incidence of taxThe proportion of a tax that is passed onto the consumer. If most of a tax rise is added to the consumer then the incidence of tax is said to be 'high'. When demand is price inelastic then the incidence of tax tends to be high
  66. 66IncomeA flow of earnings to a factor of production over a period of time, e.g. wages or salaries
  67. 67Income elasticity of demandThe proportion to which demand changes when there is a change in income
  68. 68Inferior goodsGoods or services that will see demand fall when income rises
  69. 69InflationA persistent increase in the level of prices
  70. 70InjectionsMoney that originates outside the circular flow and so will increase national income/output/expenditure
  71. 71Interest ratesThe cost of borrowing or reward for saving
  72. 72InvestmentSpending by firms on buildings, machinery, and improving the skills of the labour force
  73. 73InvisiblesIntangibles such as the provision of insurance or banking services
  74. 74Joint supplyWhen the production of one good also results in the production of another
  75. 75KeynesianThe view of John Keynes, a very influential UK economist who suggested how governments could cure mass unemployment
  76. 76Labour marketAn example of a factor market, in this case where labour is bought and sold
  77. 77Law of unintended consequencesWhen the actions of consumers, producers, and governments have effects that are unanticipated
  78. 78Long-run ASthe economy's productive capacity
  79. 79MEB (marginal external benefit)The spillover benefit to third parties of an economic transaction
  80. 80MEC (marginal external cost)The spillover cost to third parties of an economic transaction
  81. 81MPB (marginal private benefitThe benefit to an individual or firm of an economic transaction
  82. 82MPC (marginal private cost)The cost to an individual or firm of an economic transaction
  83. 83MSB (marginal social benefit)The full benefit to society of an economic transaction, including private and external benefits
  84. 84Market-clearing priceThe price at which all goods are supplied will be demanded
  85. 85Market demandTotal demand in a market for a good, the sum of all individuals' demand, at each given price
  86. 86Market failureWhere the market fails to produce what consumers require at the lowest possible cost
  87. 87Market supplyThe sum of all individual firm's supply curves at each given price
  88. 88Maximum priceA price ceiling above which the price of a good or service is not allowed to increase
  89. 89Merit goodA good that would be under-consumer in a free market, as individuals do not fully perceive the benefits obtained from consumption
  90. 90Minimum priceA price floor below which the price of a good or service is not allowed to decrease
  91. 91Monetary policyControlling the macroeconomy via changes in the monetary variables such as the money supply or interest rates
  92. 92Monetary Policy Committee (MPC)A committee of economists and central bankers who meet monthly and decide whether or not to change the rate of interest
  93. 93MonopolyA market structure dominated by a single seller of a good
  94. 94Multiplier effectWhere an increase increase or decrease in spending leads to a larger than proportionate change in the national income
  95. 95Narrow moneyNotes, coins, and balances available for normal transaction
  96. 96Negative externalitiesCosts imposed on a third party not involved with the consumption or production o f the good
  97. 97Negative output gapWhere the economy is producing less than its trend output
  98. 98Normal goodsGoods or services that will see an increase in demand when incomes rise
  99. 99Normative statementsOpinions that require value judgements to be made
  100. 100Occupational immobilityAs patters of demand and employment change, many workers may find it difficult to easily secure new jobs, since they may lack the necessary skills
  101. 101Opportunity costThe next best alternative forgone when an economic decision is made
  102. 102Pollution permitA permit sold to firms by the government allowing them to pollute to a certain limit
  103. 103Positive externalitiesA positive spillover effect to third parties of a market transaction
  104. 104Positive output gapWhen actual GDP exceeds trend GDP increasing inflationary pressure
  105. 105Positive statementsStatements that can be tested against real world data
  106. 106Price elasticityThe responsiveness of demand to a change in the price level.
    %Change in QD
    --------------------
    %Change in P
  107. 107Private goodA good that is both excusable and rival in consumption
  108. 108PrivatisationSale of government-owned assets to the private sector
  109. 109ProductionThe process that converts factor inputs into outputs of goods and services
  110. 110PPBThe PPB indicates the maximum possible output that can be achieved given a fixed set of resources and technology in a particular time period
  111. 111Productive efficiencyWhen a firm operates at minimum average total costs, producing the maximum possible output from inputs into the production process
  112. 112ProductivityA measure of efficiency, measuring the ratio of inputs to outputs; the most common measure is labour productivity, which is the output per worker
  113. 113Public goodA good that possesses the characterisitics of non-excludability and non-rivalry in consumption
  114. 114Quasi-public goodA good that has some qualities of a public good but does not fully possess the two required characteristics or non-rivalry and non-excludability
  115. 115SpecialisationThe production of a limited range of goods by an individual factor of production or firm or country, in cooperation with others so that together a complete range of goods is produced
  116. 116SubsidiesPayments by government to producers to encourage production of a good or service. Often subsidies are found in farming where farmers receive funds from governments per tonne or unit of output
  117. 117SubstitutesGoods that can be used as alternatives to another good, for example bus and rail services, or Pepsi and Coke. Close substitutes are good alternatives, whereas weak substitutes are not very good or likely alternatives, such as gas power vs hydroelectric power
  118. 118SupplyThe amount offered for sale at each given price level
  119. 119Supply-side fiscal policyChanges in the level or structure of government spending and taxation designed to improve the supply side of the economy through influencing incentives to save, to supply labour, to be entrepreneurial and to promote investment.
  120. 120Supply-side policiesA range of measures designed to increase AS and hence the potential output of the economy, though many improvements may come from the private sector
  121. 121Tight labour marketWhere firms have to increase wages to attract the labour that they require
  122. 122Trade unionAn organisation of workers set up to negotiate on wages, working hours and working conditions with employers on behalf of its members
  123. 123Trade-offWhere one macroeconomic objective has to be curtailed in favour or another objective
  124. 124UnemploymentThose without a job but who are seeking work at current wage rates
  125. 125Unemployment trapWhere individuals receive more in benefit payments than they would be paid if in a job
  126. 126Value judgementsStatements or opinions that are not testable or cannot be verified and depend very much on the views on the individual and the values they hold
  127. 127WealthStock of owned assets, e.g. housing property or a portfolio of shares
  128. 128WithdrawalsAny money not passed on in the circular flow and has the effect of reducing national income/output/expenditure

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Beschreibung
All the needed key terms for econ 1 & 2
Erstellt von
Joshua Burrows
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Durchschnittliche Bewertung 5,0 von 5 (1 Bewertung)

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