Economics 3 Flashcards
Human capital
The skills abilities, motivation and knowledge of labour. Improvements in human capital productivity and can shift the PPBto the right
Importing
The purchase of goods and services from abroad leads to expenditure for the home country
Imports
Goods or services purchased from abroad
Incidence of tax
The proportion of attacks that is passed on to the consumer. If most of the tax rise is added to the consumer and the incidence of tax is said to be high. When demand is price inelastic than the incidence of tax tends to be high.
Income
I flow of earnings to a factor of production over a period of time e.g. wages or salaries
Income elasticity of demand
The proportion to which demand changes when there is a change in income
Income induced
Will increase as income increases and decreases as income decreases
Index numbers
I waited average of a group of items compare to a given base value of 100
Indirect tax
A tax on spending
Inferior goods
Goods or services that will see demand fall when income rises
Inflation
A persistent increase in the level of prices
Inflationary pressure
Occurrences that are likely to lead to increased prices
Injections
Money that originates outside the circular flow and so will increase national income output expenditure
Interest rate
The cost of borrowing all the reward for saving
Investment
Spending by firms on buildings, machinery and improving the skills of the labour force
Investment good
A product that will increase in value over time
Invisibles
Intangibles such as the provision of insurance or banking services
Joint supply
When the production of one good also results in the production of another
Keynesian
The view of John Maynard Keynes and very influential UK Economist 1883 to 1946 who suggested how governments could cure mass unemployment
Labour market
And example of a factor markets in this case where labour is bought and sold
Law of unintended consequences
When the actions of consumers, producers and governments have effects that are on unanticipated
Long run aggregate supply
The economy’s productive capacity
Marginal external benefit
The spillover benefit to 3rd parties of an economic transaction
Marginal external cost
Spillover cost to 3rd parties of an economic transaction
Marginal private benefit
The benefit to an individual firm of an economic transaction
Marginal private cost
The cost to an individual or firm of an economic transaction
Marginal social benefit
The full benefit to society of economic transaction including private and external benefits
Marginal social cost
The full cost to society of an economic transaction including private and external costs
Market clearing price
The price at which all goods that are supplied will be demanded
Hot money
Money that is liable to rapid transfer from one country to another
What is the interest rate?
The right the bank charges
