4.1 - 6.5

  • Created by: Ashvarya
  • Created on: 19-11-14 19:43
Factors of production
resources comprising land (including natural resources), labour, capital and enterprise. They are needed to produce output.
1 of 49
Economic growth
growth in output of the economy over time - a growth of real GDP over time.
2 of 49
Gross domestic product (GDP)
the total value of goods and services produced in the country in a year
3 of 49
GDP per capita
GDP divided by the total population, therefore GDP per head.
4 of 49
Full employment
when all those able and willing to work are in paid employment at the current wage rate.
5 of 49
When workers who are able and willing to work are unable to find employment at current wage rates.
6 of 49
Claimant count
measures unemployment according to the number of people claiming unemployment-related benefits e.g. Jobseeker's Allowance (JSA)
7 of 49
Labour Force Survey
a survey of sample of households, counting people as unemployed if they are actively seeking work but do not have a job (in the week of the survey).
8 of 49
a sustained rise in the general price level over time
9 of 49
Price stability
the general level of prices is kept constant or grows at an acceptably low rate over time.
10 of 49
Rate of inflation
the rate at which the general price level rises over time
11 of 49
Consumer Prices Index (CPI)
official measure of the rate of inflation for the UK and governments of other EU countries.
12 of 49
Monetary inflation
inflation caused by growth in the economy's money supply
13 of 49
Demand-pull inflation
inflation caused by excess demand in the economy
14 of 49
Cost-push inflation
inflation caused by a rise in costs in the economy
15 of 49
a rate of inflation so high that the value of money becomes close to worthless
16 of 49
a compulsory payment to the government
17 of 49
Direct tax
a tax on income or wealth
18 of 49
Indirect tax
a tax on spending, often defined as a tax on goods and services
19 of 49
Income tax
Collects more revenue than any other and is paid by the employed on their wages and salaries
20 of 49
National insurance contributions (NICs)
These contributions are paid by both employees and employers. Effect is similar to that of income a tax - a deduction from wages
21 of 49
Corporation tax
A tax on the profits of companies
22 of 49
Inheritance tax
A tax on the transfer of wealth at the time of death
23 of 49
Value-added tax (VAT)
A tax on a wide range of goods and services
24 of 49
Excise duties
Taxes on a specific range of goods, in particular tobacco products, alcoholic drinks, petrol and diesel have high excise duties. These are all inelastic goods.
25 of 49
External cost
the negative impact of an economic transaction on a party who is not directly involved e.g. manufacturing that causes air pollution has costs for the whole population.
26 of 49
Positive/negative externalities
A negative impact is an external cost or negative externality and a positive impact is an external benefit or positive externality. Demerit goods give rise to negative externalities and merit goods give rise to positive externalities.
27 of 49
Demerit good
A good or service whose consumption is considered unhealthy or undesirable due to its bad effects on consumers. It is over-consumed if left to market forces. Examples are tobacco, alcohol, junk food etc.
28 of 49
Distribution of income
how incomes are shared out among the people of the country
29 of 49
Redistribution of income
a policy to reduce the inequalities of income, so that incomes are distributed more evenly
30 of 49
Inequalities of income
incomes are distributed unevenly so some people have a much higher income than others
31 of 49
Transfer payments
benefits to citizens which are paid out of tax revenue (of the government)
32 of 49
Regressive tax
a tax which takes a greater proportion of income from lower incomes, or takes a smaller percentage of a higher income
33 of 49
Proportional tax
a tax which takes the same proportion of income from all income levels
34 of 49
Progressive tax
a tax which takes a greater proportion of income from higher incomes, or takes a smaller percentage of a lower income
35 of 49
Market failure
when the market (through demand and supply) fails to allocate resources in the best interests of society as a whole
36 of 49
Fiscal policy
a policy that uses taxation and government spending to try to achieve the objectives of the government
37 of 49
Objectives of the government
The four main macro-economic objectives of the government - maintaining full employment, economic growth, price stability and the balance of imports and exports
38 of 49
Balanced budget
government spending is equal to tax revenue
39 of 49
Budget deficit
government spending is greater than tax revenue
40 of 49
Budget surplus
tax revenue is greater than government spending
41 of 49
Multiplier effect
a process by which an original change in incomes in the economy leads to a total change in incomes which is a multiple of the original change
42 of 49
anything that is generally acceptable as a medium of exchange
43 of 49
Banks and building societies
financial institutions that accept deposits and make loans
44 of 49
Interest rate
the reward for saving and the cost of borrowing
45 of 49
Monetary policy
a policy aimed at affecting the total supply of money in the economy
46 of 49
Interest rate policy
the use of interest rates to try to achieve the government's economic objectives
47 of 49
Bank rate
the interest rate set by the Bank of England, which affects all interest rates in the economy (also called the base rate)
48 of 49
Supply-side policies
policies that increase the ability of the economy to supply more goods and services
49 of 49

Other cards in this set

Card 2


Economic growth


growth in output of the economy over time - a growth of real GDP over time.

Card 3


Gross domestic product (GDP)


Preview of the front of card 3

Card 4


GDP per capita


Preview of the front of card 4

Card 5


Full employment


Preview of the front of card 5
View more cards


No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Objectives of Government policy resources »