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ECONOMICS iGCSE > 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 revenueº

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2
Q

macroeconomics

A

study of large economic systems such as those of a whole country or area of the world

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3
Q

mircoeconomics

A

study of small economics systems that are a part of national or international systems

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4
Q

economic growth

A

increase in level of output by a nation

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5
Q

national income

A

value of income, output or expenditure over a period of time

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6
Q

gross domestic product (GDP)

A

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

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7
Q

depression/ slump

A

bottom of economic cycle where GDP starts to fall with significant increases in unemployment

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8
Q

downturn

A

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

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9
Q

recession

A

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

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10
Q

boom

A

peak of economic cycle where GDP is growing at its fastest

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11
Q

overheat

A

if an economy overheats, demand rises too fast, causing prices and imports to rise, a situation that governments may try to correct by raising taxes and interest rates

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12
Q

unsustainable growth

A

economic growth that is not possible to sustain without causing environmental problems

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13
Q

aggregate demand

A

total demand in the economy including consumption, investment, government expenditure and exports minus imports

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14
Q

deflation

A

period where the level of aggregate demand is falling

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15
Q

inflation

A

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

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16
Q

consumer price index (CPI)

A

measure of the general price level (excluding housing costs)

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17
Q

retail price index (RPI)

A

measure of the general price level, which includes house prices and council tax

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18
Q

demand-pull inflation

A

inflation caused by too much demand in the economy relative to supply

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19
Q

cost-push inflation

A

inflation caused by rising business costs

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20
Q

interests rates

A

price paid to lenders for borrowed money; it is the price of money

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21
Q

monetarists

A

economists who believe there is a strong link between growth in the money supply and inflation

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22
Q

purchasing power of money

A

amount of goods and services that can be bought with a fixed sum of money

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23
Q

menú costs

A

costs to firms of having to make repeated price changes

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24
Q

shoe leather Costs

A

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

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25
Q

hyperinflation

A

very high inflation, rising prices out of control

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26
Q

transactions

A

payment, or the process of making one

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27
Q

unemployment

A

when those actively seeking work are unable to find a job

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28
Q

cynical or demand deficient unemployment

A

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

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29
Q

laying off

A

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

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30
Q

structural unemployment

A

unemployment caused by changes in the structure of the economy such as the decline in an industry

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31
Q

frictional unemployment

A

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

32
Q

seasonal unemployment

A

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

33
Q

voluntary unemployment

A

unemployment resulting from people choosing not to work

34
Q

balance of payments

A

record of all transactions relating to international trade

35
Q

capital and financial account

A

that part of the balance of payments where flows of savings investment and currencies are recorded

36
Q

current account

A

that part of the balance of payments where all imports and exports are recorded

37
Q

exports

A

goods and services sold overseas

38
Q

imports

A

goods and services bought from oversees

39
Q

current account deficit

A

when value of imports exceeds value of exports

40
Q

current balance

A

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

41
Q

current account surplus

A

when value of exports exceeds value of imports

42
Q

balance of trade / visible balance

A

difference between visible exports and visible imports

43
Q

invisible trade

A

trade in services

44
Q

primary income

A

money received from the loan of production factors abroad

45
Q

secondary income

A

government transfers to and from overseas agencies such as the EU

46
Q

visible trade

A

trade in physical goods

47
Q

exchange rate

A

price of one currency in terms of another

48
Q

income inequality

A

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

49
Q

Lorenz curve

A

graphical representation of the degree of income or wealth inequality in a country

50
Q

absolute poverty

A

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

51
Q

relative poverty

A

poverty that is defined relative to existing living standards for the average individual

52
Q

progressive taxation

A

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

53
Q

regressive taxation

A

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

54
Q

policy instruments

A

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

55
Q

budget

A

government spending and revenue plans for the next year

56
Q

fiscal policy

A

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

57
Q

direct taxes

A

taxes levied on the income earned by firms and individuals

58
Q

indirect taxes

A

taxes levied on spending such as VAT

59
Q

value added tax (VAT)

A

tax on some goods and services - businesses pay value added tax on most goods and services they buy and if they are vat registered trademarks charge value added tax on the goods and services

60
Q

fiscal deficit

A

amount by which government spending exceeds government revenue

61
Q

fiscal surplus

A

amount by which government revenue exceeds government spending

62
Q

national debt

A

total amount of money owned by a country

63
Q

expansionary fiscal policy

A

fiscal measures designed to stimulate demand in the economy

64
Q

contractionary fiscal policy

A

fiscal measures designed to reduce demand in the economy

65
Q

Monetary policy

A

Use of interest rates and money supply to control agregate demanda in the economy

66
Q

money supply

A

amount of money circulating in the economy

67
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

68
Q

mortgage

A

legal arrangement where you borrow money from a financial institution in order to buy land or a house, and you pay money back over a period of years

69
Q

rate of interest

A

price of borrowing money

70
Q

quantitative easing

A

buying off financial assets such as government bonds from comerical bancks, which results in a flow of money from central bank to comercial banks

71
Q

aggregate supply

A

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

72
Q

supply side policies

A

government measures designed to increase aggregate supply in the economy

73
Q

offset

A

if something such as a cost or sum of money offsets another cost it has the effect of reducing or balancing it so that the situation remains the same

74
Q

austerity

A

official action taken by a government in order to reduce the amount of money that it spends or the amount that people spend

75
Q
A

ECONOMICS iGCSE (5 decks)

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