Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics AS > Theme 2 definitions > Flashcards

Theme 2 definitions Flashcards

1
Q

Index number

A

Used to track each economic factor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Nominal value

A

Price without removing inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Real value

A

Price with removing inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Economic growth

A

An increase in the productive potential of an economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

GDP

A
  • Gross Domestic Product

- Represents the total output of an economy during a period of time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

GDP per capita

A

The average GDP per head of population

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

GNI

A
  • Gross National Income

- Takes into account income flows between countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Long run economic growth

A

Expansion of the economy capacity to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Short run growth

A

Increase in real GDP over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Power purchasing parity

A

The measurement of prices in different countries that uses the prices of specific goods to compare the purchasing power of the countries’ currencies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Inflation

A

An increase in the overall level of prices in an economy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Deflation

A

Negative inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Disinflation

A

A period in which inflation falls relative to the previous period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Basket of goods and services

A

A fixed set of consumer products and services whose price is evaluated on a regular basis, often monthly or annually.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Hyperinflation

A

Very high inflation and usually accelerating rates of inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Consumer Price Index (CPI)

A
  • It is the price of a weighted average market basket of consumer goods and services purchased by households
  • Main measure of inflation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Shrinkflation

A

Changing the size of products rather than the price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Redistribution effect

A

Inflation redistributes income away from certain groups in the economy and towards other groups

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Menu costs

A

Costs incurred by firms when they have to print new menus due to changes in prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Money illusion

A

Refers to the idea that some people feel better off when their nominal income increases, even though the price level may increase at the same rate and possibly even faster

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Demand pull inflation

A

When aggregate or total demand rises and there is no increase in aggregate supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Cost pull inflation

A

When aggregate supply decreases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Money supply

A

The amount of money flowing in the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Employment

A

The state of being paid to work for a company or organisation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Unemployment

A

The state of being out of work while being willing and able to work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Long term unemployment

A

It accounts for people who have been out of work for at least one year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Cyclical unemployment

A

Cyclical unemployment is caused by low levels of aggregate demand, reducing the demand for labour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Frictional unemployment

A

Frictional unemployment is caused by workers seeking a better job or who are in-between jobs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Structural unemployment

A

Caused by lack of suitable skills for the jobs available

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Unemployment trap

A

This is a situation in which there is little financial incentive for someone who is unemployed to start working because the combined loss of benefits and a need for them to pay taxes may lead to them being worse off

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Real wage unemployment

A

When real wage rates are stuck at a level above that needed to reduce unemployment any further

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Economically active

A

Those who are of working age but are neither in work or actively seeking work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Discouraged workers

A

People who have failed to find work and have given up looking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Underemployment

A

Those who would prefer to work longer hours or are in a job below their skill set, they are under-utilised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Labour force survey

A

Identifies the number of people available for work, and seeking work, but without a job

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Claimant count measure

A

The total number of recipients of JSA and UC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Balance of payment accounts

A

They record all financial transactions between residents of a country and the rest of the world over a time period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Balance of trade

A

The difference between the value of visible exports and visible imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Current balance

A

Difference between the value of total exports and total imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Current account

A

It records money flow between the UK and the rest of the world arising from trade in goods and services, income from owning overseas assets and overseas transfers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Trade in goods (visible)

A

These are goods traded in or out of the country, known as visible

42
Q

Trade in services (invisibles)

A

These are services traded in or out of the country, known as invisibles.

43
Q

Exports

A

Goods and services sold to foreigners by UK firms

44
Q

Imports

A

Goods and services bought by UK residents and firms from foreigners

45
Q

Current account surplus

A

When there are more inflows than outflows

46
Q

Current account deficit

A

When there are more inflows than outflows

47
Q

Primary income

A

Income from the loan of factors of production abroad

48
Q

Secondary income

A

A range of mainly government transfers to and from overseas organisations

49
Q

Open economy

A

An economy in which there is foreign trade

50
Q

Closed economy

A

An economy in which there is no foreign trade

51
Q

National output

A

e value of the flow of goods and services from firms and households

52
Q

National expenditure

A

The value of spending by households on goods and services

53
Q

National income

A

The value of income paid by firms to households in return for land, labour and capital

54
Q

Aggregate demand

A

It is the total demand for goods and services in an economy at a given time

55
Q

Wealth

A

Wealth is the value of a stock of assets owned by someone

56
Q

Income

A

Income is the flow of money going to factors of production

57
Q

Injection

A

An injection into the circular flow is a monetary addition to the economy

58
Q

Investment

A

Spending by firms on new capital equipment like factories offices and machinery

59
Q

Government spending

A

Spending by central, local and other government agencies

60
Q

Withdrawal

A

Where money is removed from the economy

61
Q

Savings

A

Money which is saved and not spent by households or firms

62
Q

Consumer spending

A

How much consumers spend on goods and services.

63
Q

X-M (Exports - imports)

A

This is the value of the current account on the balance of payments.

64
Q

Wealth effect

A

Refers to when changes in the price level affect the real value of peoples wealth

65
Q

International trade effect

A

The international trade effect speaks about the change in value of exports and imports

66
Q

Interest rate effect

A

Refers to when changes in the price level affect the rate of interest

67
Q

Depreciation

A

Depreciation is the decrease in the value of stock

68
Q

Gross investment

A

Measures investment before depreciation

69
Q

Net investment

A

Measures investment after depreciation

70
Q

Investment in human capital

A

Investment in the education and training of workers

71
Q

Investment in physical capital

A

Investment in factories and machinery

72
Q

Retained profit

A

Savings that firms keep and do not distribute to their owners

73
Q

Capital spending

A

Investment spending by the government`

74
Q

Exchange rate

A

An exchange rate is the price of one country’s currency in terms of another country’s currency

75
Q

Level of trade protection

A

It refers to restrictions to international trade imposed by governments

76
Q

Aggregate supply

A

The total amount of goods and services that producers are willing and able to supply at a given price over a given time period

77
Q

SRAS

A

A period in which at least one factor of production is fixed

78
Q

Supply side shock

A

When there is a large change in wage rates, material prices or taxation.

79
Q

LRAS

A

A period in which all factors of production are variable and technological change is possible

80
Q

Positive output gap

A

Actual GDP is more than the potential GDP.

81
Q

Negative output gap

A

Actual GDP is less than the potential GDP

82
Q

Multiplier effect

A

When injections into the circular flow of income eventually lead to an even bigger increase in national income

83
Q

Multiplier ratio

A

Measures the proportionate change in national income in response to a change in withdrawals and injections

84
Q

Positive multiplier

A

When an increase in injections leads to a greater final increase in real GDP

85
Q

Negative multiplier

A

When a decrease in injections leads to a greater final decrease in real GDP

86
Q

MPC

A

The proportion of any extra income that is spent on goods and services

87
Q

MPS

A

The proportion of any extra income that is saved

88
Q

MPT

A

The proportion of any extra income that is paid as taxes

89
Q

MPW

A

The proportion of any extra income that is withdrawn from the economy

90
Q

Land

A

Not only as the land itself but also all the natural resources that come with it

91
Q

Participation rates

A

Participation rates are the proportion of the population of a certain age who are either in work or seeking work

92
Q

Economic efficiency

A

The way in which the factors of production are combined to produce goods and services

93
Q

Demand side shock

A

A shock which affects aggregate demand

94
Q

Supply side shock

A

A shock which affects aggregate supply

95
Q

Output gap

A

The difference between the actual level of real GDP and is estimated long term trend at a specific point

96
Q

Easterlin paradox

A

The idea that increases in GDP do not lead to increases in happiness

97
Q

Non marketed output

A

Output of goods and services that are not sold in the market and do not generate any income

98
Q

Underground market

A

Where a buying/selling transaction is unrecorded and are therefore not included in GDP/GNI

99
Q

Purchasing power

A

It refers to the quantity of goods and services that can be bought with money

100
Q

Excise duties

A

Excise duties are indirect taxes on the sale or use of specific products, such as alcohol, tobacco, and energy.

Economics AS (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions