Basic Defintions

Question 1

Material living standard

Answer 1

A measure of a country’s access to material goods and services.

Question 2

Output

Answer 2

Quantity of goods and services produced in a given time period, by a firm, industry or country.

Question 3

Aggregate demand

Answer 3

Total demand for final goods and services in an economy at a given time.

Question 4

Expenditure

Answer 4

Payment of cash or cash equivalent for goods and services.

Question 5

Taxation

Answer 5

Compulsory payment to the government from the private sector to finance government spending.

Question 6

Interest rates

Answer 6

Annual percentage cost of borrowing funds in financial market.

Question 7

Macroeconomics

Answer 7

The branch of economics dealing with aggregate economic behaviour or the economy as a whole.

Question 8

Microeconomics

Answer 8

The branch of economics dealing with individual and market behaviour.

Question 9

Productivity

Answer 9

Output per unit of input over time.

Question 10

Government intervention

Answer 10

Regulatory croons taken by the government in order to affect or interfere with decisions made by individuals, groups or organisations regarding social and economic matters.

Question 11

Tariffs

Answer 11

An indirect tax added to the prow of imports to make them dearer to local consumers and protect local industries from overseas competition.

Question 12

Subsidies

Answer 12

A cash payment by the government designed to help producers compete by enabling them to sell their product at a lower price than would otherwise occur. Such assistance can lead to inefficiency.

Question 13

Import quotas

Answer 13

Government restrictions imposed to limit imports through Te issue of licenses to importers.

Question 14

Bilateral free-trade agreement

Answer 14

Trading arrangement between two nations designed to foster exchange of goods and services.

Question 15

Multilateral free/trade agreements

Answer 15

Trading arrangement between three or more nations designed to foster international trade.

Question 16

Circular flow of income

Answer 16

Illustrates how the economy works and how it s different parts interrelate.

Question 17

Inflation

Answer 17

Rise in the general level of prices of goods and services over time.

Question 18

Opportunity cost

Answer 18

What is given up to satisfy wants.

Question 19

Capital goods

Answer 19

Used to make other goods (e.g. Wood, oil)

Question 20

Capital accumulation

Answer 20

When governments get more capital goods.

Question 21

Specialisation

Answer 21

When someone specialises in a separate stage of the production process.

Question 22

Interdependence

Answer 22

Reliance on other people with different specialisations.