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A-level economics > vocab > Flashcards

vocab Flashcards

1
Q

circular flow of income

A

model of the economy which shows the flow of goods, services and factors and their payments around the economy

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2
Q

closed income

A

an economy where there is no foreign trade

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3
Q

income

A

rent, interest, wages and profits earned from wealth owned by economic actors

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4
Q

closed economy

A

an economy where there is no foreign trade

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5
Q

injections

A

in the circular flow of income, spending which is not generated by household including investment, government spending and exports

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6
Q

national income

A

the value of the output, expenditure or come of an economy over a period of time

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7
Q

open economy

A

an economy where there is a trade with other countries

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8
Q

wealth

A

a stock of assets which can be used to generate a flow of production or income. for example, physical wealth such as factories and machines is used to make goods and services

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9
Q

withdrawals/leakages

A

in the circular flow of income, spending by households which does not flow back to domestic firms. It includes saving, taxes and imports

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10
Q

national output

A

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

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11
Q

national expenditure

A

this is the value of spending by households on goods and services.

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12
Q

factor services

A

the services provided by the factors of production.

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13
Q

aggregate

A

the sum or total

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14
Q

aggregate demand

A

the total demand for a country’s goods and services at a given price level and in a given period of time

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15
Q

aggregate demand curve

A

shows the relationship between the price level and equilibrium national income. As the price level rises the equilibrium level of national income falls .

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16
Q

price level

A

average of each of the prices of all the products produced in an economy

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17
Q

consumer expenditure

A

spending by households on consumer products

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18
Q

consumer goods

A

goods and services that are used by people to satisfy their needs and wants

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19
Q

investment

A

spending on capital goods

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20
Q

capital goods

A

goods that are used in the production of other goods such as factories, roads, machines and equipment

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21
Q

government spending

A

spending by the central governments and local government on goods and services

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22
Q

exports

A

products sold abroad

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23
Q

imports

A

products brought from abroad

24
Q

net exports

A

value of exports minus the value of imports

25
Q

transfer payments

A

money transferred from one person or group to another not in return for any goods or service

26
Q

job seekers allowance

A

benefit paid by the government to those unemployed and trying to find a job

27
Q

trade surplus

A

the value of exports exceeding the value of imports

28
Q

trade deficit

A

the value of imports exceeding the value of exports

29
Q

consumer confidence

A

how optimistic consumers are about future economic prospects

30
Q

rate of interest

A

the charge for borrowing money and the amount received for lending money

31
Q

average propensity to consume

A

the proportion of disposable income spent it is consumer expenditure divided by disposable income

32
Q

net savers

A

people who save more than they borrow

33
Q

distribution of income

A

how income is shared between households in a country

34
Q

inflation

A

a sustained rise in the price level

35
Q

saving

A

real disposable income minus spending

36
Q

average propensity to save

A

the proportion of disposable income saved, it is saving divided by disposable income

37
Q

dissave

A

spending more than disposable income

38
Q

savings ratio

A

savings as a proportion of disposable income

39
Q

capacity utilisation

A

the extent to which firms are using their capital

40
Q

corporation tax

A

a tax on firms’ profit

41
Q

retained profits

A

profits kept by firms to finance investment

42
Q

unit cost

A

average cost per unit of production

43
Q

real GPD

A

the country’s output measured in constant prices and so adjusted for inflation

44
Q

gross domestic product

A

total output of goods and services in a country

45
Q

exchange rate

A

the price of one currency in terms of another currency

46
Q

aggregate supply curve

A

the relationship between the average price level in the economy and the level of total output

47
Q

full capacity

A

where no extra production can take place in the long run with existing resources

48
Q

long run aggregate supply

A

the aggregation of supply curves which assumes wage rates are variable both upwards and downwards

49
Q

short run aggregate supply

A

the upward sloping supply curve which assumes that money wage rates are fixed

50
Q

supply side shocks

A

factors such as changes in wager rates or commodity prices, which cause the short run aggregate supply curve to shift

51
Q

macroeconomic equilibrium

A

a situation where aggregate demand equals aggregate supply and real GDP

52
Q

multiplier effect

A

the process by which any change in a component of aggregate demand results in a greater final change in real GDP

53
Q

marginal propensity to save

A

the increase in saving divided by the increase in income that caused it

54
Q

marginal propensity to tax

A

the increase in tax revenues divided by the increase in income that caused them

55
Q

marginal propensity to withdraw

A

MPS+MPT+MPM

56
Q

multiplier

A

the figure used to multiply a change in an injection into the circular flow, such as investment

57
Q

accelerator theory

A

the theory that the level of investment is related to past changes

A-level economics (6 decks)

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