the total demand for a country's goods and services at a given price level in a given time period
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Aggregate supply (AS)
the total amount that producers in an economy are willing and able to supply at a given price level in a given time period
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allocative effiency
where consumer satisfaction is maximised
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circular flow of income
the movement of spending and income throughout the economy
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change in demand
this is where a change in a non-pricefactor leads to an increase or decrease in demand for a product
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complements
goods for which there is a joint demand
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command economy
an economic system in which resources are state owned and are also allocated centrally
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consumer price index
a measure of changes in the price of a representative basket of consumer goods and services.
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demand
the quantity of a product that consumers are able and willing to purchase at various prices over a period of time
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demand curve
this shows the relationship between the quantity demanded and the price of a product
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GDP
the total output of goods and services produced in a country
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Price elasticity of demand (PED)
the responsiveness of the quantity demanded to a change in the price of the product
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average propensity to consume (APC)
the proportion of disposable income spent. it is consumer expenditure divided by diposable income
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Average propensity to save (APS)
the proportion of disposable income saved. it is saving divided by disposable income
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balance of payments
a record of money flowing in and out of a country
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capacity utilisation
the extent to which firms are using their capital goods
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ceteris paribus
Latin:other things being equal: assuming other variables remain unchanged
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choice
the selection of appropriate alternatives
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claimaint count
a measure of unemployment that includes those receiving unemployment-related benefits
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consumer confidence
how optimistic consumers are about future economic prospects
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corporation tax
a tax on firms' profits
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cost-push inflation
increases in the price level caused by increases in the cost of production
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cross elasticity of demand (XED)
the responsiveness of demand for one product in relation to a change in the price of another product
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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, income and current transfers going abroad
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cyclical unemployment
unemployment arising from a lack of aggregate demand
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demand-pull inflation
increases in the price level caused by increases in aggregate demand
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demand schedule
the data that is used to draw the demand curve for a product
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demerit goods
their consumption is more harmful that is actually realised
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productive effiency
where production takes place using the least amount of scarce resources
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division of labour
the specialisation of labour where the production process is broken down into separate tasks
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efficiency
where the best use of resources is made for the benefit of consumers
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elasticity
the extent to which buyer and sellers respond to a change in market conditions
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fiscal policy
the taxation and spending decisions of a government
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disposable income
income after taxes on income have been deducted and state benefits have been added
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normal goods
goods for which an increase in income leads to an increase in demand;goods with positive income elasticity of demand
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inferior goods
goods for which an increase in income leads to a fall in demand
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Other cards in this set
Card 2
Front
Aggregate supply (AS)
Back
the total amount that producers in an economy are willing and able to supply at a given price level in a given time period
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