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IGCSE > Economics 2.1 definitions > Flashcards

Economics 2.1 definitions Flashcards

1
Q

Define budget deficit

A

Amount by which government spending is greater than government revenue

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2
Q

Define macroeconomics

A

Study of large economic systems

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3
Q

Define microeconomics

A

Study of small economics systems

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4
Q

Define economic growth

A

Increase in the level of output by a nation

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5
Q

Define national income

A

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

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6
Q

Define GDP

A

Market value of all final goods and services produced in a period, an internationally recognised measure of national income

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7
Q

Define boom

A

peak of the economic cycle where GDP is rising at its fastest

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8
Q

Define depression or slump

A

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

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9
Q

Define downturn

A

period in the economic cycle where GDP grows but slowly

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10
Q

Define recession

A

period of temporary economic decline during which trade and industrial activity are reduced

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11
Q

Define overheat

A

if an economy overheats, demand rises too fast causing prices and imports to rise, the government may try to control by raising interest rates and taxes

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12
Q

Define unsustainable growth

A

economic growth that is not able to be sustained without causing environmental problems

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13
Q

Define aggregate demand

A

total demand in the economy

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14
Q

Define deflation

A

period where the level of aggregate demand is falling

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15
Q

Define inflation

A

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

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16
Q

Define CPI

A

measure of the general price level

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17
Q

Define RPI

A

measure of general price level including house prices and council taxes

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18
Q

Define demand pull inflation

A

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

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19
Q

Define cost push inflation

A

inflation caused by rising business costs

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20
Q

Define interest rates

A

price paid to lenders for borrowed money

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21
Q

Define monetarists

A

economists who believe there a stong link between growth in money supply and inflation

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22
Q

Define 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

Define menu costs

A

costs to firms of having to make repeated price changes

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24
Q

Define shoe leather costs

A

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

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25
Q

Define hyperinflation

A

very high levels of inflation

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26
Q

Define transactions

A

payment, or the process of making one

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27
Q

Define unemployment

A

Those actively searching for a job but unable to obtain one

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28
Q

Define cyclical 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

Define laying off

A

stop employing someone as theres no work for them to do

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30
Q

Define structural unemployment

A

unemployment caused by changes in the structure of an economy

31
Q

Define frictional unemployment

A

when workers are unemployed for a short period of time when transitioning between jobs

32
Q

Define seasonal unemployment

A

Unemployment caused when seasonal workers are laid off as their season has ended

33
Q

Define voluntary unemployment

A

Unemployment resulted from people not choosing to work

34
Q

Define balance of payments

A

record of all transactions relating to international trade

35
Q

Define capital and financial accounts

A

where flow of savings, investment and currencies are recorded inside the balance of payments

36
Q

Define current account

A

where all exports and imports are recorded inside the balance of payments

37
Q

Define exports

A

goods and services sold overseas

38
Q

Define imports

A

goods and services bought from overseas

39
Q

Define current account deficit

A

when the value of imports exceeds exports

40
Q

Define current account surplus

A

when the value of exports exceeds imports

41
Q

Define current balance

A

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

42
Q

Define balance of trade

A

difference between visible exports and visible imports

43
Q

Define invisible trade

A

trade in services

44
Q

Define visible trade

A

trade in goods

45
Q

Define primary income

A

money received from the loan of production factors abroad

46
Q

Define secondary income

A

goverment transfers to and from overseas agencies such as the EU

47
Q

Define exchange rate

A

price of one currency in terms of another

48
Q

Define income inequality

A

differences in income that exist between the different groups of earners in society

49
Q

Define lorenz curve

A

graphical representation of the degree of income or wealth inequality ina country

50
Q

Define absolute poverty

A

Where people do not have enough resources to meet the basic needs for survival

51
Q

Define relative poverty

A

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

52
Q

Define progressive taxation

A

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

53
Q

Define regressive taxation

A

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

54
Q

Define policy instruments

A

tools the government uses to implement in their policies

55
Q

Define budget

A

government’s spending and revenue plans for the next year

56
Q

Define fiscal policy

A

decisions about goverment spending, taxation and levels of borrowing that affect aggregate demand in an economy

57
Q

Define direct taxes

A

taxes levied on the income earned by firms and individuals

58
Q

Define indirect taxes

A

taxes levied on spending, such as VAT

59
Q

Define VAT

A

taxes on specific goods and services

60
Q

Define fiscal deficit

A

amount by which goverment spending exceeds goverment revenue

61
Q

Define fiscal surplus

A

amount by which government revenue exceeds government spending

62
Q

Define national debt

A

total amount of money owed by a country

63
Q

Define expansionary fiscal policy

A

fiscal measures designed to stimulate demand in an economy

64
Q

Define contractionary fiscal policy

A

fiscal measures designed to reduce demand in an economy

65
Q

Define monetary policy

A

use of interest rates and money supplied to control aggregate demand in an economy

66
Q

Define money supply

A

Amount of money circulating in an economy

67
Q

Define base rate

A

rate of interest set by central banks for lending to other banks

68
Q

Define mortgage

A

where you borrow money from a financial institution in order to buy land or a house, and you pay the money back of a couple of years

69
Q

Define rate of interest

A

price of borrowing money

70
Q

Define quantitative easing

A

buying of financial assets which results in a flow of money from central banks to commercial banks

71
Q

Define real economy

A

part of the economy that is concerned with actually producing goods and services

72
Q

Define aggregate supply

A

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

73
Q

Define supply side policies

A

Government measures designed to increase aggregate supply in an economy

IGCSE (5 decks)

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