F582 (OCR National and International Economy) Definitions from textbook

All the definitions that appear in the National and International part of the AS OCR Economics textbook.

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  • Created on: 26-04-13 17:36
Preview of F582 (OCR National and International Economy) Definitions from textbook

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National and International Economy Definitions
Aggregate Demand - The total demand for a country's goods and services at a
given price level and in a given time period.
Aggregate Supply - The total amount that producers in an economy are willing
and able to supply at a given price level in a given time period.
Automatic Stabilisers - Forms of government spending and taxation that change
automatically to offset fluctuations in economic activity.
Average Propensity to Consume (APC) - The proportion of disposable income
spent. It is consumer expenditure divided by disposable income.
Average Propensity to Save (APS) - The proportion of disposable income saved.
It is saving divided by disposable income.
Balance of Payments - A record of money flows coming in and going out of a
Capacity Utilisation - The extent to which firms are using their capital goods.
Circular Flow of Income - The movement of spending and income throughout
the economy.
Claimant Count - A measure of unemployment that includes those receiving
unemployment-related benefits.
Consumer Confidence - How optimistic consumers are about future economic
Consumer expenditure - Spending by households on consumer products.
Consumer Prices Index (CPI) - A measure of changes in the price of a
representative basket of consumer goods and services.
Corporation Tax - A tax on firms' profits.
Cost-push Inflation - Increases in the price level caused by increases in the costs
of production.
Current Account Deficit - When more money is leaving the country than entering
it, as a result of sales of its exports, income and current transfers from abroad
being less than imports and income and current transfers going abroad.
Cyclical Unemployment -Unemployment arising from a lack of aggregate
Deflation - A sustained fall in the general price level.
Deflationary - Policy measures designed to reduce aggregate demand.

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Demand-pull Inflation - Increases in the price level caused by increases in
aggregate demand.
Discretionary Fiscal Policy - Deliberate changes in government spending and
taxation designed to influence aggregate demand.
Dissave - Spending more than disposable income.
Distribution of Income - How income is shared out between households in a
Economic Cycle - The tendency for economic activity to fluctuate outside its
trend growth rate, moving from a high level of economic activity (boom) to
negative economic growth (recession).…read more

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Gross Domestic Product (GDP) - The total output of goods and services
produced in a country.
Hysteresis - Unemployment causing unemployment.
Imports - Products bought from abroad.
Inflation - A sustained rise in the price level.
Inflation Rate - The percentage increase in the price level over a period of time.
Inflationary Noise - The distortion of price signals caused by inflation.
Informal Economy - The advantage of producing on large scale, in the form of
lower long-run average cost.…read more

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Multiplier Effect - The process by which any change in a component of aggregate
demand results in a greater final change in real GDP.
Net Exports - The value of exports minus the value of imports.
Net Savers - People who save more than they borrow.
Nominal GDP - Output measured in current prices and so not adjusted for
Occupational Immobility of Labour - Difficulty in moving from one type of job to
another.…read more

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Retail Prices Index (RPI) - A measure of inflation that is used for adjusting
pensions and other benefits to take account of changes in inflation and
frequently used in wage negotiations.
Retained Profits - Profit kept by firms to finance investment.
Saving ­ Real disposable income minus spending.
Savings Ratio - Savings as a proportion of disposable income.
Shoe leather Costs - Costs in terms of the extra time and effort involved in
reducing money holdings.…read more

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Wealth - A stock of assets, e.g. property, shares and money held in a savings
World Trade Organisation (WTO) - An international organisation that promotes
free international trade and rules on international trade disputes.…read more


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