Economics Definitions

Micro and Macro Definitions for AS Economics OCR.

Aggregate Demand
Total demand for a country's goods and services at a given price level and in a given time period.
1 of 100
Aggregate Supply
Total amount that producers in an economy are willing and able to supply at a given price level in a given time period.
2 of 100
Allocative Efficiency
Where consumer satisfaction is maximised.
3 of 100
Asymmetric Information
Information not equally shared between 2 parties.
4 of 100
Automatic Stablisers
Forms of Govt. Spending and taxation that change automatically to offset fluctuations in economic activity.
5 of 100
Average Propensity to Consume (APC)
Proportion of disposable income spent. Consumer Expenditure/Disposable Income
6 of 100
Average Propensity to Save (APS)
Proportion of disposable income saved. Saving/Disposable Income.
7 of 100
Balance of Payments
Record of money flows coming in and going out of a country.
8 of 100
Capacity Utilisation
Extent to which firms are using their capital goods.
9 of 100
Capital
Man-made aids to production.
10 of 100
Ceteris Paribus
(Latin: other things being equal): assuming other variables remain unchanged.
11 of 100
Change in demand
Where a change in a non-price factor leads to an increase/decrease in demand for a product.
12 of 100
Circular Flow of Income
Movement of spending and income throughout an economy.
13 of 100
Claimant Count
Measure of unemployment that includes those receiving unemployment-related benefits.
14 of 100
Command Economy
Economic System in which resources are state owned and also allocated centrally.
15 of 100
Complements
Goods for which there is joint demand.
16 of 100
Consumer Confidence
How optimistic consumers are about future economics prospects
17 of 100
Consumer Expenditure
Spending by households on consumer products.
18 of 100
Consumer Price Index (CPI)
Measure of changes in the price of a representative basket of consumer goods and services. Different from RPI (Retail) in methodology and coverage.
19 of 100
Corporation Tax
A tax on firm's profits.
20 of 100
Cost-Push Inflation
Increases in price level caused by increases in costs of production.
21 of 100
Cross Elasticity of Demand (XED)
Responsiveness of demand for one product in relation to change in the price of another product.
22 of 100
Current Account Deficit
When more money is leaving the country then 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.
23 of 100
Cyclical Unemployment
Unemployment arising from a lack of aggregate demand.
24 of 100
Deflation
A sustained fall in the general price level.
25 of 100
Demand
Quantity of a product that consumers are able and willing to purchase at various prices over a period of time.
26 of 100
Demand Curve
Shows the relationship between the quantity and demanded and the price of a product.
27 of 100
Demand-Pull Inflation
Increases in the price level caused by increases in Aggregate Demand
28 of 100
Demand Schedule
Data that is used to draw the demand curve for a product.
29 of 100
Demerit Goods
Their consumption is more harmful than actually realised.
30 of 100
Developed Economy
Economy with a high level of income per head.
31 of 100
Developing Economy
Economy with a low level of income per head.
32 of 100
Direct Tax
One that taxes the income of people and firms and can't be avoided.
33 of 100
Disposable Income
Income after taxes on income have been deducted and state benefits have been added.
34 of 100
Dissave
Spending more than disposable income.
35 of 100
Distribution of Income
How income is shared out between households in a country.
36 of 100
Division of Labour
Specialisation of labour where the production process is broken down into separate tasks.
37 of 100
Economic Cycle
Tendency for economic activity to fluctuate outside its trend growth rate, moving from a high level of economic activity (boom) to negative economic activity (recession)
38 of 100
Economic Efficiency
Where both allocative and productive efficiency are achieved.
39 of 100
Economic Growth
Short Run : increase in Real GDP. Long Run : an increase in productive capacity (max output that the economy can make)
40 of 100
Economically Inactive
People of working age who are neither employed nor unemployed
41 of 100
Economic Problem
How to allocate scarce resources among alternative uses.
42 of 100
Economics
Study of how to allocate resources in the most effective way.
43 of 100
Economic System
The way in which production is organised in a country/group of countries.
44 of 100
Effective Demand
Willingness and ability to buy a product.
45 of 100
Efficiency
Where the best use of resources is made for the benefit of consumers.
46 of 100
Elastic
Responsive to a change in market conditions.
47 of 100
Elasticity
Extent to which buyers and sellers respond to a change in market conditions.
48 of 100
Entrepreneur
Someone who bears the risk of business and who organises production
49 of 100
Entrepreneurship
Willingness of an entrepreneur to take risks and organise production
50 of 100
Equilibrium Price
Price where demand and supply are equal.
51 of 100
Equilibrium Quantity
Quantity that is demanded and supplied at equilibrium price.
52 of 100
Exchange
Process by which goods and services are traded.
53 of 100
Exchange Rate
Price of one currency in terms of another currency/currencies.
54 of 100
Exports
Products sold abroad.
55 of 100
External Benefits
Benefits that accrue as a consequence of externalities to third parties.
56 of 100
External Costs
Costs that are the consequence of externalities to third parties.
57 of 100
Externality
An effect whereby those not directly involved in taking a decision are affected by the actions of others.
58 of 100
Deflationary
of policy measures designed to reduce AD.
59 of 100
Discretionary Fiscal Policy
Deliberate changes in govt. spending and taxation designed to influence AD.
60 of 100
Disequilibrium
Any position in the market where demand and supply aren't equal.
61 of 100
Factor Endowment
Stock of factors of production.
62 of 100
Factor of Production
Resource inputs that are available in an economy for the production of goods and servies.
63 of 100
Factor Services
Services provided by the factors of production.
64 of 100
Fiscal Drag
People's income being dragged into higher tax bands as a result of tax brackets not being adjusted in line with inflation.
65 of 100
Fiscal Policy
the taxation and spending decisions of a government.
66 of 100
Free Market Mechanism
System by which the market forces of demand and supply determine prices and the decisions made by consumers and firms.
67 of 100
Free Rider
Someone who directly benefits from the consumption of a public good but who does not contribute to its provision.
68 of 100
Frictional Unemployment
Short-term unemployment occurring when workers are between jobs
69 of 100
Full Unemployment
A situation where those wanting and able to work can find employment
70 of 100
Goods
Tangible Products i.e. products that can be seen and touched.
71 of 100
Government Bond
A financial asset issued by the central or local government.
72 of 100
Government Spending
Spending by the central bank and local government on goods and services.
73 of 100
Gross Domestic Product (GDP)
Total output of goods and services produced in a country.
74 of 100
Household
Group of people whose spending decisions are connected.
75 of 100
Human Capital
Education, Training and Experience that a worker, group of workers, possesses.
76 of 100
Hyperinflation
An inflation rate about 50%
77 of 100
Hysteresis
Unemployment causing unemployment.
78 of 100
Imports
Products bought from abroad.
79 of 100
Income Elastic
Goods for which a change in income makes a greater proportionate change in demand.
80 of 100
Income Elasticity of Demand
Responsiveness of demand to a change in income.
81 of 100
Income Inelastic
Goods for which a change in income makes a less than proportionate change in demand.
82 of 100
Index Number
A number showing the variation in, for e.g. wages or prices, compared with a chosen base period/date
83 of 100
Indirect Tax
A tax levied on goods and services.
84 of 100
Inefficiency
Any situation where economic efficiency is not achieved.
85 of 100
Inferior Goods
Goods for which an increase in income leads to a fall in demand.
86 of 100
Inflation
A sustained rise in the price level, the % increase in the price level or a period of time.
87 of 100
Inflationary Noise
The distortion of price signals caused by inflation.
88 of 100
Informal Economy
Economic activity that isn't recorded/registered with the authorities in order to avoid paying tax or complying with regulations that don't maximise welfare.
89 of 100
Injections
Additions of extra spending into the circular flow of income.
90 of 100
International Labour Organisation (ILO)
A member organisation of the UN that collects stats on labour market conditions and seeks to improve working conditions.
91 of 100
International Monetary Fund (IMF)
An international organisation that helps co-ordinate the international monetary system.
92 of 100
Investment
Spending on Capital Goods.
93 of 100
Labour
Quantity and Quality of human resources.
94 of 100
Labour Force
The people who are employed and unemployed, that is, those who are economically active.
95 of 100
Labour Force Survey
A measure of unemployment based on a survey using the ILO definition of unemployment.
96 of 100
Labour Productivity
Output of a good/service per worker in a given time period.
97 of 100
Land
Natural Resources in an economy.
98 of 100
Leakages
Withdrawals of possible spending from the circular flow of income.
99 of 100
Long-Term Unemployment
Unemployment lasting more than a year.
100 of 100

Other cards in this set

Card 2

Front

Total amount that producers in an economy are willing and able to supply at a given price level in a given time period.

Back

Aggregate Supply

Card 3

Front

Where consumer satisfaction is maximised.

Back

Preview of the back of card 3

Card 4

Front

Information not equally shared between 2 parties.

Back

Preview of the back of card 4

Card 5

Front

Forms of Govt. Spending and taxation that change automatically to offset fluctuations in economic activity.

Back

Preview of the back of card 5
View more cards

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