practice exam questions Flashcards
1
Q
define the term ‘national income’
A
the total value of goods and services produced in an economy over a period of time
1
Q
state two possible reasons for the increase in investment by firms
A
- increase in business confidence
- decrease in interest rates
2
Q
define the term ‘economic growth’
A
an increase in real GDP - the total value of goods and services produced in an economy over a period of time
3
Q
define the term ‘purchasing power parities’
A
converting one country’s currency into another to buy the same amount of goods, used to compare the standard of living in different countries
4
Q
explain one likely reason for the reduction in the total UK trade deficit in January 2015
A
- the value of the pound becomes weaker
- exports become cheaper and imports become more expensive
- causes a fall in exports and a rise in imports
- resulting in a reduced trade deficit
