Economics and business B Theme 2 definitions A-I

HideShow resource information
  • Created by: baimzej
  • Created on: 07-03-16 19:06
Aggregate demand
is the sum total of demand from all areas of the economy. AD=C+I+G+X-M
1 of 46
Aggregate supply
is the total output supplied from all sources in the economy
2 of 46
Balance of trade
the difference in value between visible exports and visble imports
3 of 46
Appreciation
this occurs when the exchange rate rises, making imports cheaper and raising the price of exports
4 of 46
Base rate
is set by the Bank of England and influences the interest rate accross the country
5 of 46
Boom
a time of rapid growth and expansion (rising depand, lower unemployment, rising inflation)
6 of 46
BRICS
stands for Brazil, Russia, India, China and South Africa
7 of 46
Capacity utilisation
measures actual output as a percentage of the theoretical output at its maximum level
8 of 46
Capital
includes all assets that can potentially generate income ie land, premises, machinery and financial assets
9 of 46
Capital intensive production
uses large amounts of capital but relatively small ammount of labour costs
10 of 46
Common markets
completely free trade internally and a common external trade policy covering the rest of the world
11 of 46
Comparitive advantage
refers to the theory that if two countries specialise in the product which for them has the lowest opportunity cost, and then trade, real incomes will increase
12 of 46
Conglomerate integration
occurs when two businesses that have no common ground, join together
13 of 46
Constant prices
value each year's output at the price levels of a base year, removing the effects if inflation
14 of 46
Consumption
is total household spending on goods and services
15 of 46
Cost-push inflation
is caused by rising costs of production (costs shift AS upwards, prices must increase)
16 of 46
Cyclical employment
is caused by a downturn in the economic cycle, spending falls and less employees are needed
17 of 46
Demand pull inflation
caused by excess aggregate demand, the quantity needed exceeds the total output
18 of 46
Depreciation
is a fall in the exchange rate that make imports dearer and exports cheaper
19 of 46
Diseconomies of scale
occurs when further increases in size begins to increase average costs and inefficiencies develop
20 of 46
Disposable income
the ammount of income that can be spent on goods and services. spending power after tax
21 of 46
Downturn
the stage of the ecomomic cycle when the boom slows and the rate of growth or GDP decreases
22 of 46
Economic cycle
fluctuations in the levels and rates of growth of GPD over a period of time.
23 of 46
Economies of scale
leads to reduction in average costs (AC) brought about by an increase in the size of the business
24 of 46
Efficiency
organising production so that production is maximised, waste is minimised and costs are lowest possible
25 of 46
Emerging economies
have fast growing manafacturing sectors,
26 of 46
Employment
refers to all people of working age that have jobs
27 of 46
Expansion policies
stimulates the level of economic activity by reducing leakages and increasing injection of money
28 of 46
Extension strategies
ways of lengthening the maturity stage of the product life cycle
29 of 46
External economies of scale
reduce production costs for all businesses in the industry
30 of 46
Fiscal policy
adjsts taxation and government expenditure to control AD/economy
31 of 46
Foreign direct investment
refers to funds invested in other economies
32 of 46
Free trade areas
groups of countries that trade freely with one another, with no trade barriers, but with each retaining its own trade policies in relation to the rest of the world
33 of 46
Globalisation
increasing interdependence of trading economies with increased imports, exports and capital movements (stromg economic growth)
34 of 46
Horizontal integration
two businesses in the same industry have joined together
35 of 46
Human capital
the knowledge, expertise and skills of individuals or the workforce
36 of 46
Income elastic
applies to products for which an income change causes a proportionally bigger change in quantity demand (1
37 of 46
Income inelastic
applies to products for which an income change causes a proportionally smaller change in quantity demand (0-1)
38 of 46
Income elsticity of demand
%change in quantity demanded / % change income x 100
39 of 46
Inferior good
a good or service that sees an increase in demand following a fall in income and a fall in demand following an increase in income
40 of 46
Inflation
measured using the CPI consumer price index, the headline rate and the baisis for the governments inflation target, or the RPI the retail price index, which includes housing costs eg council tax and mortgage interest payment
41 of 46
Injections
investment, government expenditure and exports - increase demand for domestically produced goods and services
42 of 46
Inorganic growth
growth of a firm by joining with another by way of merger or takeover
43 of 46
Internal economies of scale
are those that benefit the individuals business
44 of 46
Investment
spending now on capital assets that will generate income in the future
45 of 46
Invisible
trade in service ie banking insurance, tourism
46 of 46

Other cards in this set

Card 2

Front

is the total output supplied from all sources in the economy

Back

Aggregate supply

Card 3

Front

the difference in value between visible exports and visble imports

Back

Preview of the back of card 3

Card 4

Front

this occurs when the exchange rate rises, making imports cheaper and raising the price of exports

Back

Preview of the back of card 4

Card 5

Front

is set by the Bank of England and influences the interest rate accross the country

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies & Economics resources:

See all Business Studies & Economics resources »See all Theme 2 A-I resources »