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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
Balance of payments
A record of the financial transactions overs a period of time between a country and its trading partners.
26
Balance of trade in goods
Visible exports minus visible imports.
27
Balance of trade in services
Invisible exports minus invisible imports.
28
Balanced budget
When government receipts equal government spending in a financial year
29
Barometric price leadership
A firms whose price changes are accepted as they are adroit at interpreting market conditions.
30
barriers to entry
Obstacles that stop new firms entering the market.
31
Base rate
The interest rate a bank sets to determine its lending and borrowing rates.
32
Benefit principle
The argument that taxes should be linked to the benefits received by taxpayers.
33
Benign deflation
Falling prices resulting from technological advances across the economy.
34
Brand loyalty
A measure indicating the degree to which consumers will purchase a firm's product rather than a competing firm's product.
35
Broad money
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
Budget deficit
Where government spending exceeds government receipts in a financial year.
37
Budget surplus
Where government receipts exceed government spending in a financial year.
38
Capital and financial account
The part of the balance of payments that records capital flows in and out the country.
39
Capital expenditure
Government spending to improve the productive capacity of the nation.
40
Capital market discipline
Where firms may be taken over by other firms if they appear to be making lower profits than their assets would suggest.
41
Carbon footprint
The amount of greenhouse gases produced measured in terms of carbon dioxide.
42
Cartel
A group of firms working together or colluding.
43
Casual unemployment
A kind of frictional unemployment occurring when workers are laid off on a short-term basis.
44
Ceiling price
Maximum price determined by the authorities.
45
Classical/real wage unemployment
Results from real wages being above their market-clearing level, creating and excess supply of labour.
46
Collusion
Where firms cooperate in their pricing and output | policies.
47
Comparative advantage
Where a country can produce a good with a lower resource cost input than other countries.
48
Competition Commission
A government organisation responsible for implementing policy in relation to monopolies.
49
Concentration ratio
The proportion of the market share held by the dominant firms.
50
Conglomerate merger
Where firms with no obvious connection combine.
51
Constant returns to scale
Where an increase in factor input leads to a proportional increase in factor outputs.
52
Consumer price index (CPI)
The headline measure of inflation derived from movements in a weighted basket of consumer goods over a 12-month period.
53
Contestable market
Where there is free entry and free exit of other firms.
54
Contractionary or deflationary fiscal policy
Where the government runs a large budget surplus.
55
Copyright
Ownership of rights giving redress at law for copying by a third party.
56
Corporate citizenship
Indicates that organisations embrace sustainable development.
57
Corporation
A private enterprise firm incorporated with the Registrar of Companies.
58
Cost-benefit analysis (CBA)
An investment appraisal technique that takes into account all the private external costs and benefits of an economic decision.
59
Cost-push inflation
Inflation caused by economic-wide increases in production costs.
60
Crawling peg
Frequent changes in the value of a fixed exchange rate.
61
Credit crunch
Used to refer to the reduced willingness of financial institutions to lend to households and to one another.
62
Crowding out
Where a public sector deficit deters private sector investment and consumption.
63
Current account
The part of the balance of payments that primarily records trade in goods and services.
64
Current account deficit
When imports of goods and services exceed exports.
65
Current account surplus
When exports of goods and services exceed imports.
66
Current expenditure
government spending on the day-to-day running of public sector, including raw materials and wages of public sector workers.
67
Cyclical or demand deficient unemployment.
Unemployment due to a lack of aggregate demand.
68
Dead-weight loss
Reduction in consumer and producer surplus when output is restricted to less than the optimum level.
69
Decreasing returns to scale
Where an increase in factor inputs lead to a less than proportionate increase in factor outputs.
70
Deflation
A fall in the general price level.
71
Deindustrialisation
A fall in the proportion of national output accounted for by the manufacturing sector of the economy.
72
Delisting
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
Demand-pull inflation
Inflation resulting from too much demand in the economy, relative to supply capacity.
74
Department of trade and industry
The government department responsible for the British industry
75
Depreciated
When a floating currency decreasing in value.

Economics A2 (5 decks)

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