Economics Definitions

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ADVALOREM TAX
Tax levied as a percentage of the price of a good
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AGGREGATE DEMAND
Total demand in the economy including consumption, investment, government expenditure and exports minus imports
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ANTI-COMPETITIVE PRACTICES
An attempt by firms to prevent or restrict competition
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ASSISTED AREAS
Areas designated as having problems by the UK or EU and are eligible
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AVERAGE COSTS
The cost per unit of output; it is equal to total cost divided by outout
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BACKWARD VERTICAL INTEGRATION
Merging with a firm that operates in the previous stage of production
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BALANCE OF PAYMENTS
A record of all transactions relating to international trade
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BALANCE OF TRADE
The difference between visible exports and visible imports
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BARRIERS TO ENTRY
Obstacles that may discourage a firm from entering a market
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BASE RATE
The rate of interest set by the MPC which influences all other rates in the economy
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BASIC ECONOMIC PROBLEM
Allocation of country's resources between competing uses that represent infinite wants
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BOOM
The peak of the economic cycle where GDP is growing at its fastest
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BUDGET
The government's spending and revue plans for the next year
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BUDGET DEFICIT
The amount by which government spending exceeds government revenue
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BUDGET SURPLUS
The amount by which government revenue exceeds government spending
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CAPITAL INTENSIVE
Where production relies more heavily on machinery than labour
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CARTEL
Where a group of firms or countries join together to agree on pricing or output levels in the market
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CHOICE
Deciding between alternative uses of scarce resources
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COLLUSION
Agreements between firms to restrict competition
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COMPETITION
The rivalry that exists between firms when trying to sell goods to the same group of customers
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COMPETITION COMMISSION
A government body that carries out investigations into mergers and markets where there may be some consumer exploitation
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COMPLEMENTARY GOODS
Goods that are purchased together because they are consumed together
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CONGLOMERATE MERGER
The merging of firms in completely different business activities
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CONSUMER PRICE INDEX
A measure of the general price level; used in the UK and across the eurozone
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Card 2

Front

AGGREGATE DEMAND

Back

Total demand in the economy including consumption, investment, government expenditure and exports minus imports

Card 3

Front

ANTI-COMPETITIVE PRACTICES

Back

Preview of the front of card 3

Card 4

Front

ASSISTED AREAS

Back

Preview of the front of card 4

Card 5

Front

AVERAGE COSTS

Back

Preview of the front of card 5
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