Economic Definitions Flashcards
Exports
What Britain sells to other countries overseas
Ideally hear should be higher than imports
Imports
Buying things from other countries overseas
Unemployment
People who do not earn a salary
These people require support from the state and are limited in what they can buy
Draining on economy
Credit
When people borrow money but eventually are obliged to pay it back
Credit allowed people to spend
Paying back more than you borrow
Inflation
When money is devalued
Interest rates
The amount of money added to debt
Mixed economy
An economic system involving both private and public (state) enterprise
Balance of payments
Record of all economic transactions between citizens of a country and the rest of the world
Sterling
British money
Central planning
Deciding how much money should be spent on specific schemes
Who is in charge of central planning in 2016?
George Osborne
Consumption
The buying of goods and services used in households
Deflation
When money has too much value
Worse than inflation
People wait to make large purchases so no money is spent
Reserve currency
A strong currency that a central bank holds as part of foreign exchange reserves (used in international trade)
Prosperity
State of wealth and comfort
Income tax
Paying tax on the income you earn
This pays for britains PLC (the NHS, hospitals, education etc.)
Devaluation
Lowering the value of a country’s currency (new fixed rate within a fixed exchange rate system)
Fixed exchange rate
System in which a currency’s value is fixed against either one other currency many currencies
Deficit
Difference between what the government spends and gains (usually from tax)
The free market
People can sell what they like
The market decides the price and value of things
The conservatives believe in the free market
