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Passmore > Eco4 > Flashcards

Eco4 Flashcards

1
Q

Market supply

A

The sum of all individual firm’s supply curves at each given price

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2
Q

Maximum price

A

The price ceiling above which the price of a good or service is not allowed to increase

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3
Q

Merit good

A

A good that would be underconsumed in a free market as individuals do not fully perceive the benefits of obtained from consumption

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4
Q

Minimum price

A

A price floor below which the price of a good or service is not allowed to decrease

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5
Q

Monetary policy

A

Controlling the macroeconomy via changes in monetary variables such as the money supply or interest rates

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6
Q

Monetary policy committee

A

The committee of economists and central bankers who meet monthly and decide whether or not to change the rate of interest

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7
Q

Money supply

A

The total amount of money in an economy

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8
Q

Monopoly

A

A market structure are dominated by a single seller of a good

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9
Q

Multiplier effect

A

When increase or decrease in spending leads to a larger than proportionate change in the national income

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10
Q

Narrow money

A

Notes, coins and balances available for normal transactions

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11
Q

Natural rate of unemployment

A

The rate of unemployment that is consistent with the stable rate of inflation

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12
Q

Negative expectations

A

Businesses expect future sales and profits to be less due to factors like falling aggregate demand

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13
Q

Negative externalities

A

Costs impose on a third party not involved with the consumption of production of a good

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14
Q

Negative output gap

A

Where The economy is producing less than its trend output

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15
Q

Net government spending

A

The difference between government spending and taxation

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16
Q

Nominal GDP/nominal national income/nominal output

A

GDP/income/output figures not adjusted for inflation

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17
Q

Normal goods

A

Goods or services that will see an increase in demand when incomes rise

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18
Q

Normative statements

A

Opinions that require value judgements to be made

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19
Q

Occupational immobility

A

As patterns of demand unemployment change, many workers may find it difficult to easily secure new jobs, since they may lack the necessary skills

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20
Q

Opportunity cost

A

The next best alternative forgone when an economic decision is made. Note it is only the next best alternative not a range of alternatives

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21
Q

Partial market failure

A

Where the free market provides a product but with a misallocation of resources

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22
Q

Participation rates

A

Proportion of the country’s population that makes up the country’s labour force

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23
Q

Planned supply

A

The amount produces plan to produce at each given price

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24
Q

Policy instrument

A

Techniques use to achieve policy objectives

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25
Q

Policy objective

A

Government’s major macroeconomic objectives

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26
Q

Pollution permit

A

A permit sold to firms by the government, allowing them to pollute up to a certain limit

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27
Q

Positive expectations

A

Businesses expect the future sales and profits to improve due to factors like increased aggregate demand

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28
Q

Positive externality

A

A positive spillover effects of third parties of a market transaction

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29
Q

Positive output gap

A

What actual GDP exceeds trend GDP increasing inflationary pressure

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30
Q

Positive statements

A

Statements that can be tested against real-world data

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31
Q

Price ceiling

A

See maximum price

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32
Q

Price elasticity

A

The responsiveness of demand to a change in the price level. The formula is percentage change in quantity demanded divided by percentage change in price

33
Q

Price floor

A

See minimum price

34
Q

Private good

A

A good that is both excludable and rifle in consumption

35
Q

Privatisation

A

Sale of government owned assets to the private sector

36
Q

Product markets

A

Markets in which all kinds of goods and services are traded, for examples the market for airline travel or for mobile phones

37
Q

Production

A

The process that converts factor inputs into outputs of goods and services

38
Q

Production possibility boundary

A

The PPP indicates the maximum possible output that can be achieved given a fixed set of resources and technology in a particular time period

39
Q

Productive efficiency

A

When a firm operates at minimum average total cost, producing the maximum possible output from inputs into the production process

40
Q

Productivity

A

A measure of efficiency, measuring the ratio of inputs to outputs; the most common measure is labour productivity, which is the output per worker

41
Q

Profit

A

When total income of revenue for a firm is greater than total costs

42
Q

Public good

A

A good that possesses the characteristics of nonexcludability and non-rivalry in consumption

43
Q

Quasi public good

A

A good that has some of the qualities of a public good but does not fully possess the two required characteristics of non-rivalry and nonexcludability

44
Q

Real GDP/real national income/real output

A

GDP/income/output figures adjusted for inflation

45
Q

Real interest rate

A

The money rate of interest minus the rate of inflation

46
Q

Recession

A

When economy is growing at less than its long-term trend rate of growth

47
Q

Renewable resources

A

Resources that are able to be replenished over time whereas nonrenewables such as all and gas are likely to run out

48
Q

Repo rate

A

The interest rate that are set by the monetary policy committee of the Bank of England in order to influence inflation. Short for sale and repurchase rate

49
Q

RPI X

A

A measure of the price level that excludes payments to service mortgage interest on the retail price index measure. Used as the target measure for inflation by the government and MPC until the end of 2003

50
Q

Savings

A

A withdraw from the circular flow

51
Q

Specialisation

A

The 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

52
Q

Stock

A

A quantity measured at a particular point in time

53
Q

Structural unemployment

A

Unemployment caused by a change in the demand side or supply side of the economy

54
Q

Subsidies

A

Payments by government to producers to encourage production of a good or services. Often subsidies are found in farming where farmers receive funds from government per tonne or unit of output. This typically means that prices can be lower than would otherwise be the case.

55
Q

Substitutes

A

Good secondary use as alternatives to another good for example bus and rail services on Mars bars and snickers. Close substitutes are good alternatives, whereas weak substitutes are not very good or likely alternatives, such as gas fired power in the UK and hydroelectric power

56
Q

Supply

A

The amount offered for sale at each given price level

57
Q

Supply-side fiscal policy

A

Changes 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, which are largely micro economic in nature

58
Q

Supply-side policies

A

A range of measures designed to increase aggregate supply and hence the potential output of the economy, though many improvements may come from the private sector

59
Q

Supply-side shock

A

Something that will increase or reduce the costs hence supply-side of all firms in the economy e.g. a large increase in the price of a loyal

60
Q

Sustainable

A

And activity carried out today that does not stop future generations maximising their welfare

61
Q

Tight labour market

A

Where firms have to increase wages to attract the labour that they require

62
Q

Total factor productivity is

A

The overall productivity of inputs used by firm in producing a particular level of output

63
Q

Trade union

A

An organisation of workers set up to negotiate on wages, working hours and working conditions with employers on behalf of its members

64
Q

Trade off

A

We are one macro economic objective has to be curtailed in favour of another objective

65
Q

Transfer payments

A

Government payments to individuals for which no service is given in return e.g. state benefits

66
Q

Transmission mechanism of monetary policy

A

How changes in the base interest rate influence the components of aggregate demand

67
Q

Unemployment

A

Those without a job but who are seeking work at current wage rates

68
Q

Unemployment trap

A

Where individuals receive more in benefit payments then they would be paid if they were in a job

69
Q

Value judgements

A

Statements or opinions expressed that are not testable or cannot be verified and depend very much on the views of the individual and the values they hold

70
Q

Variable costs

A

Course of production that very with output

71
Q

Visibles

A

Exports or inputs that are tangible, that you can see and touch as it crosses international boundaries

72
Q

Voluntary unemployment

A

Workers who are not prepared to take a job at current wage levels

73
Q

Wealth

A

A stock of owned assets e.g. housing property or a portfolio of shares

74
Q

Weighting

A

Where a commodity is given a weighting proportional to its importance in the general pattern of consumer spending

75
Q

Withdrawals

A

Any money not passed on in the circular flow and has the effect of reducing national income/output/expenditure

76
Q

Market failure

A

Where the market fails to produce what consumers require at the lowest possible cost

77
Q

Hello

A

Bye

78
Q

What is economic diversity?

A

Haven’t a clue

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