Economic Principles Terms (A)

Definitions of key terms for basic economic principles beginning with the letter A

?
  • Created by: Chloe
  • Created on: 18-04-13 20:06
absolute advantage
a country has an absolute advantage over another in the product of a good if it can produce it with less resources than the other country can
1 of 28
Accelerationist theory
The theory that unemployment can only be reduced below the natural level at the cost of accelerating inflation
2 of 28
accelerator theory
the level of investment depends on the rate of change of national income, and as a result tends to be subject to substantial fluctuations
3 of 28
active balances
money held for transactions and precautionary purposes
4 of 28
actual growth
the percentage annual increase in national output actually produced
5 of 28
ad valorem tariffs
tariffs levied as a percentage of the price of the import
6 of 28
ad valorem tax
a tax on a good levied as a percentage of its value. It can be a single-stage tax or a multi-stage tac (such as VAT)
7 of 28
adaptive expectations hypothesis
the theory that people base their expectations of inflation based on past inflation rates
8 of 28
adjustable peg
a system whereby exchange rates are fixed for a period of time but may be devalued (or revalued) if a deficit (or surplus) becomes substantial
9 of 28
aggregate demand
total spending on goods and services made in the economy. It consists of 4 elements: consumer spending (C), investment (I), government spending (G) and the expenditure on exports (X) minus the expenditure on imports (M). AD = C + I + G + X - M
10 of 28
aggregate demand for labour curve
a curve showing the total demand for labour in the economy at different levels of real wage rates (downward sloping)
11 of 28
aggregate supply
the total amount of output in the economy
12 of 28
aggregate supply of labour curve
a curve showing the total amount of people willing and able to work at different average real wage rates
13 of 28
allocative efficiency
a situation where the current combination of goods produced and sold gives the maximum satisfaction for each consumer at their current levels of income. NB a redistribution of income would lead to a different combination of goods that was efficient
14 of 28
appreciation
a rise in the free-market exchange rate of the domestic currency with foreign currencies
15 of 28
arc elasticity
the measurement of elasticity between two points in a curve
16 of 28
assets
possessions, or claims held on others
17 of 28
asymmetric information
where on party in an economic relationship has more information than another
18 of 28
asymmetric shocks
shocks (such as an oil price increase or a recession in another part of the world) that have different-sized effects on different industries, regions or countries
19 of 28
automatic fiscal stabilisers
tax revenues that rise and government expenditure that falls as national income rises. The more they change ith income, the biggere the
20 of 28
average (total) cost
total cost (fixed plus variable) per unit of output (AC = TC/Q = AFC + AVC)
21 of 28
average cost pricing
where firms set the price by adding a profit mark-up to the average cost
22 of 28
average fixed cost
total cost per unit of output AFC = TFC/Q
23 of 28
Average formula for price elasticity of demand (or 'mid-point' formula)
∆Qd/average Qd ÷ ∆P/average P
24 of 28
Average physical product
total output (TPP) per unit of the variable factor in question (APP = TPP/Qv)
25 of 28
Average rate of income tax
income taxes as a proportion of a person's total (gross) income: T/Y
26 of 28
average revenue
total revenue per unit of output. When all output is sold at the same price, average revenue will be the same as price: AR = TR/Q = P
27 of 28
average variable cost
total variable cost per unit of output: AVC = TVC/Q
28 of 28

Other cards in this set

Card 2

Front

The theory that unemployment can only be reduced below the natural level at the cost of accelerating inflation

Back

Accelerationist theory

Card 3

Front

the level of investment depends on the rate of change of national income, and as a result tends to be subject to substantial fluctuations

Back

Preview of the back of card 3

Card 4

Front

money held for transactions and precautionary purposes

Back

Preview of the back of card 4

Card 5

Front

the percentage annual increase in national output actually produced

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Fun resources:

See all Fun resources »