key terms week 1 econ Flashcards
Consumption
household spending
Investment
Firms spending on capital goods
Govt spending
govt spending on healthcare; education; welfare
Exports
Goods and services leaving the UK and income coming in as a result (INJECTION)
Imports
Goods and services entering the UK and income leaving as a result (LEAKAGE)
Savings
money/income that isn’t spent
Taxation
a tariff on spending and income that generates revenue for government
Factors of production
productive resources that are used to produce every good or service (land, labour, capital, enterprise)
Labour
Human resource that earns an income in the form of wages
Land
Natural resource that earns an income in the form of rent
Capital
Technological resource (a man made aid to production) that earns an income in the form of interest
Enterprise
Human resource with ideas that take a risk by creating a new product (allocating the other factor resources) that earns an income in the form of profit
Income
flow of money - e.g. wages, rent
Wealth
stock a of money - e.g. savings and other financial assets
Economic growth
Where the total value of output or expenditure, or income in an economy increases over a period of time
Recession
Negative economic growth over a 6 month period
Inflation
Average price level increases
Unemployment
where people are willing and able to work but they cannot find a job
Market
a place where buyers and sellers meet to exchange goods and services
Capitalism (free market)
where resources are allocated solely by the free market (Adam Smith)
Mixed economy
where resources are allocated by both the market and the state (John Maynard Keynes)
Communism (govt. provision)
where resources are allocated by the govt (Karl Marx)
