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Economics A2 > Unit three: key words > Flashcards

Unit three: key words Flashcards

1
Q

Absolute advantage

A

Where a country using a given resource input is able to produce more than other countries with the same input.

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2
Q

Absolute poverty

A

When an individual or household’s income is insufficient for them to afford basic shelter, food and clothing.

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3
Q

Accelerator theory

A

The theory that the level of investment is related to past changes in national income.

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4
Q

Activist shareholders

A

Shareholders that will clamour for greater dividends and ay mobilise other shareholders to oppose management.

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5
Q

Activity rate/Participation rate

A

The proportion of the population of working age in a job or actively seeking work.

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6
Q

Actual growth

A

An increase in the productive potential of the economy matched by an increase in demand.

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7
Q

Ad-volorem

A

A tax which is a percentage of the price of the unit.

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8
Q

Adaptive expectations

A

Where decisions about the future are based upon past information.

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9
Q

Adjustable peg

A

Value of the fixed exchange rate can be changed as circumstances require

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10
Q

Allocative efficiency

A

The optimum allocation of scarce resources that best accords with the consumers’ pattern of demand.

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11
Q

Allocative ineffeciency

A

When resources are not used to produce goods and services wanted by customers.

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12
Q

Anglo-Saxon neo-liberalism

A

Economic reform aimed at boosting the dynamism of economies - in contrast to the ‘social model’ which stresses social objectives.

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13
Q

Annual General Meeting

A

Annual meeting where shareholders can discuss the accounts and elect directors.

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14
Q

Anticipated inflation

A

Where economic agents correctly predict the future rate of inflation.

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15
Q

Appreciated

A

When a floating currency increases in value

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16
Q

Appreciation

A

Increasing the value of currency in a free-floating exchange rate system.

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17
Q

Automatic stabilisers

A

Features of government spending and taxation that minimise fluctuations in the economic cycle.

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18
Q

Average cost pricing

A

Setting the price at the level of average cost.

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19
Q

Average fixed cost

A

Total fixed costs divided by the number produced.

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20
Q

Average product

A

The total product divided by the number of workers.

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21
Q

Average revenue

A

Total revenue divided by the number sold

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22
Q

Average total cost

A

Total cost divided by the number produced

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23
Q

Average variable cost

A

Total variable costs divided by the number produced.

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24
Q

Backward-bending supply curve for labour

A

The individual labour supply curve is thought to be this shape because it is assumed workers will prefer to work fewer hours as their income increases above a certain level.

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25
Q

Balance of payments

A

A record of the financial transactions overs a period of time between a country and its trading partners.

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26
Q

Balance of trade in goods

A

Visible exports minus visible imports.

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27
Q

Balance of trade in services

A

Invisible exports minus invisible imports.

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28
Q

Balanced budget

A

When government receipts equal government spending in a financial year

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29
Q

Barometric price leadership

A

A firms whose price changes are accepted as they are adroit at interpreting market conditions.

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30
Q

barriers to entry

A

Obstacles that stop new firms entering the market.

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31
Q

Base rate

A

The interest rate a bank sets to determine its lending and borrowing rates.

32
Q

Benefit principle

A

The argument that taxes should be linked to the benefits received by taxpayers.

33
Q

Benign deflation

A

Falling prices resulting from technological advances across the economy.

34
Q

Brand loyalty

A

A measure indicating the degree to which consumers will purchase a firm’s product rather than a competing firm’s product.

35
Q

Broad money

A

Money held in banks and building societies the is not immediately accessible. This money is held in accounts for which notice is required to make withdrawals.

36
Q

Budget deficit

A

Where government spending exceeds government receipts in a financial year.

37
Q

Budget surplus

A

Where government receipts exceed government spending in a financial year.

38
Q

Capital and financial account

A

The part of the balance of payments that records capital flows in and out the country.

39
Q

Capital expenditure

A

Government spending to improve the productive capacity of the nation.

40
Q

Capital market discipline

A

Where firms may be taken over by other firms if they appear to be making lower profits than their assets would suggest.

41
Q

Carbon footprint

A

The amount of greenhouse gases produced measured in terms of carbon dioxide.

42
Q

Cartel

A

A group of firms working together or colluding.

43
Q

Casual unemployment

A

A kind of frictional unemployment occurring when workers are laid off on a short-term basis.

44
Q

Ceiling price

A

Maximum price determined by the authorities.

45
Q

Classical/real wage unemployment

A

Results from real wages being above their market-clearing level, creating and excess supply of labour.

46
Q

Collusion

A

Where firms cooperate in their pricing and output

policies.

47
Q

Comparative advantage

A

Where a country can produce a good with a lower resource cost input than other countries.

48
Q

Competition Commission

A

A government organisation responsible for implementing policy in relation to monopolies.

49
Q

Concentration ratio

A

The proportion of the market share held by the dominant firms.

50
Q

Conglomerate merger

A

Where firms with no obvious connection combine.

51
Q

Constant returns to scale

A

Where an increase in factor input leads to a proportional increase in factor outputs.

52
Q

Consumer price index (CPI)

A

The headline measure of inflation derived from movements in a weighted basket of consumer goods over a 12-month period.

53
Q

Contestable market

A

Where there is free entry and free exit of other firms.

54
Q

Contractionary or deflationary fiscal policy

A

Where the government runs a large budget surplus.

55
Q

Copyright

A

Ownership of rights giving redress at law for copying by a third party.

56
Q

Corporate citizenship

A

Indicates that organisations embrace sustainable development.

57
Q

Corporation

A

A private enterprise firm incorporated with the Registrar of Companies.

58
Q

Cost-benefit analysis (CBA)

A

An investment appraisal technique that takes into account all the private external costs and benefits of an economic decision.

59
Q

Cost-push inflation

A

Inflation caused by economic-wide increases in production costs.

60
Q

Crawling peg

A

Frequent changes in the value of a fixed exchange rate.

61
Q

Credit crunch

A

Used to refer to the reduced willingness of financial institutions to lend to households and to one another.

62
Q

Crowding out

A

Where a public sector deficit deters private sector investment and consumption.

63
Q

Current account

A

The part of the balance of payments that primarily records trade in goods and services.

64
Q

Current account deficit

A

When imports of goods and services exceed exports.

65
Q

Current account surplus

A

When exports of goods and services exceed imports.

66
Q

Current expenditure

A

government spending on the day-to-day running of public sector, including raw materials and wages of public sector workers.

67
Q

Cyclical or demand deficient unemployment.

A

Unemployment due to a lack of aggregate demand.

68
Q

Dead-weight loss

A

Reduction in consumer and producer surplus when output is restricted to less than the optimum level.

69
Q

Decreasing returns to scale

A

Where an increase in factor inputs lead to a less than proportionate increase in factor outputs.

70
Q

Deflation

A

A fall in the general price level.

71
Q

Deindustrialisation

A

A fall in the proportion of national output accounted for by the manufacturing sector of the economy.

72
Q

Delisting

A

Refers to the practise of removing the stock of a company from a stock exchange so that investors can no longer trade shares of the stock on that exchange.

73
Q

Demand-pull inflation

A

Inflation resulting from too much demand in the economy, relative to supply capacity.

74
Q

Department of trade and industry

A

The government department responsible for the British industry

75
Q

Depreciated

A

When a floating currency decreasing in value.

Economics A2 (5 decks)

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