Economics Uni1 1 KW (2)

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  • Created by: Katryna
  • Created on: 07-12-12 21:53
Definition of Aggregate demand
refers to the total of all the demand in an economy, from consumers, investment, government expenditure and the balance between exports and imports.
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Aggregate demand curve
a diagrammatic representation of the total level of demand in the economy at different price levels.
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Definition of Aggregate supply curve
a diagrammatic representation of total quantities of output in the economy at different price levels.
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Definition of Bankruptcy
is a situation in which an individual of a business had insufficient cash or other assets with which to settle debts. A business will be forced to crease trading. Legally, the term bankrupt is not applied to companies; ‘insolvent’ is the term used.
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Definition of Benefits
a gain. We sometimes use this term as shorthand for benefits provided from government funding. Such benefits can be in kind (e.g. health care) or in cash (e.g. state pensions).
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Definition of Boom
a time of rapid economic growth typically linked with lower unemployment and rising inflation.
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Definition of Bulk buying economies
occur when businesses are purchasing large enough quantities to be changed a lower price per unit, either because unit supplier costs are reduced or because the buyer has market power.
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Definition of Consumer price index (CPI)
an index based on a weighted collection of goods and services, intended to reflect the impact of price changes on a typical household. This index excludes some components of real spending (e.g. taxes). It is used for many international comparisons an
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Definition of Cyclical unemployment
occurs because of falls in aggregate demand during the downturn of the trade cycle and subsequent recession.
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Definition of Demand curve
a graphical representation of the relationship between quantity demanded and price, for a product in a market. Non-price factors influencing demand are assumed to be fixed; any change in them causes a shift to a new demand curve.
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Definition of Depreciation
is the loss of performance and value in capital equipment over time. Part of gross investment is to offset depreciation.
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Economic cycle
the tendency of national or global economic activity to fluctuate between upswing, boom, downturn and recession.
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Definition of Economies of scale
are ways in which long run increased in output and capacity can reduce costs per unit of output and increase efficiency. A bigger ship, for example, does not need two captains.
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Definition of Equilibrium price
the price at which quantity supplied and quantity demanded are equal in a market, leaving neither excess supply nor excess in demand.
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Definition of Euro zone
the European Union member countries which have adopted the euro as their currency. Some members such as Sweden and the UK have not adopted the euro.
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Definition of Frictional unemployment
is unemployment due to movement between jobs in a dynamic economy. Frictional unemployment is normally regarded as relatively short term and less problematic than other types of unemployment.
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Definition of Gross domestic product (GDP)
is the sum of the value of a country’s output over the course of a year.
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Definition of Human capital
refers to the knowledge and skills embodied in people. These are now known to increase productivity very markedly.
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Definition of Income
is the flow of money received by an individual or a household over time. Incomes are often a reward for economic activity.
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Definition of Income lifecycle
the notion that there is a typical sequence from initially low incomes during youth, building to peak earnings and then falling on or before retirement.
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Definition of Net investment
involves spending on new capital equipment over and above the level of spending on replacement of work out equipment. This increases productive capacity.
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Opportunity cost
the best alternative foregone when a particular choice is made. This could be in terms of spending alternatives, choosing between potential lines of business, or simply allocating time to one particular activity.
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Definition of Product efficiency
means minimising the average cost of production by minimising resource use. The term technical efficiency has the same meaning.d
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Definition of Productivity
refers to efficiency in the use of resources. This is often measured as output over time. For example, output per worker per hour is the usual measure of labour productivity.
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Definition of Regional unemployment
occurs in a particular geographical area, after resulting from structural unemployment in localised industries.
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Definition of Seasonal unemployment
reflects the uneven pattern of activity throughout the year in some industries.
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Definition of Social capital
refers to capital assets which are publicly owned, such as most roads, schools and hospitals.
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Definition of Structural unemployment
is caused by structural change in the economy, such as the decline of an industry, or technological change. Structural unemployment can be long-term, especially when it is also regional.
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Definition of Supply curve
a graphical representation of the quantities businesses will supply to a market at different price levels.
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Other cards in this set

Card 2

Front

a diagrammatic representation of the total level of demand in the economy at different price levels.

Back

Aggregate demand curve

Card 3

Front

a diagrammatic representation of total quantities of output in the economy at different price levels.

Back

Preview of the back of card 3

Card 4

Front

is a situation in which an individual of a business had insufficient cash or other assets with which to settle debts. A business will be forced to crease trading. Legally, the term bankrupt is not applied to companies; ‘insolvent’ is the term used.

Back

Preview of the back of card 4

Card 5

Front

a gain. We sometimes use this term as shorthand for benefits provided from government funding. Such benefits can be in kind (e.g. health care) or in cash (e.g. state pensions).

Back

Preview of the back of card 5
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