Unit 2 Key Terms

?
  • Created by: Emilyy11
  • Created on: 24-04-14 20:32
Factors of production
Resources comprising land (including natural resources), labour, capital and enterprise.
1 of 41
Economic growth
Growth in output of the economy over time - a growth of real GDP over time.
2 of 41
Gross Domestic Product (GDP)
The total value of goods and services produced in the country in a year.
3 of 41
GDP per capita
GDP divided by the total population, therefore GDP per head.
4 of 41
Full employment
When all those able and willing to work are in paid employment at the current wage rate.
5 of 41
Unemployment
When workers who are able and willing to work are unable to find employment at current wage rates.
6 of 41
Claimant count
Measures unemployment according to the number of people claiming unemployment-related benefits (such as Jobseeker's Allowance).
7 of 41
Labour Force Survey
A survey of a sample of households, counting people as unemployed if they are actively seeking work but do not have a job (in the week of the survey).
8 of 41
Inflation
A sustained rise in the general price level over time.
9 of 41
Price stability
The general level of price is kept constant or grows at an acceptably low rate over time.
10 of 41
Rate of inflation
The rate at which the general price level rises over time.
11 of 41
Consumer Price Index
The official measure of the rate of inflation.
12 of 41
Monetary inflation
Inflation caused by growth in the economy's money supply.
13 of 41
Demand-pull inflation
Inflation caused by excess demand in the economy.
14 of 41
Cost-push inflation
Inflation caused by a rise in costs in the economy.
15 of 41
Hyperinflation
A rate of inflation so high that the value of money becomes close to worthless.
16 of 41
Tax
A compulsory payment to the government.
17 of 41
Direct tax
A tax on income or wealth.
18 of 41
Indirect tax
A tax on spending, often defined as a tax on goods and services.
19 of 41
External cost
The negative impact of an economic transaction on a party who is not directly involved in the transaction. For example, manufacturing that causes air pollution has costs for the whole population (negative externality and positive externality).
20 of 41
Demerit good
A good or service whose consumption is considered unhealthy or undesirable due to its bad effects on the consumers. It is over-consumed if left to market forces. Demerit goods have negative externalities and merit goods have positive externalities.
21 of 41
Distribution of income
How incomes are shared out among the people of the country.
22 of 41
Redistribution of income
A policy to reduce the inequalities of income so that incomes are distributed more evenly.
23 of 41
Inequalities of income
Incomes are distributed unevenly so some people have a much higher income than others.
24 of 41
Transfer payments
Benefits to citizens which are paid out of tax revenue.
25 of 41
Regressive tax
A tax that takes a greater proportion of income from lower incomes, or a smaller percentage of a lower income.
26 of 41
Proportional tax
A tax that takes the same proportion of income from all income levels.
27 of 41
Progressive tax
A tax that takes a greater proportion of income from higher incomes, or takes a smaller percentage of a lower income.
28 of 41
Market failure
When the market (through demand and supply) fails to allocate resources in the best interests of society as a whole.
29 of 41
Fiscal policy
A policy that uses taxation and government spending to try to achieve the objectives of the government.
30 of 41
Balanced budget
Government spending is equal to tax revenue.
31 of 41
Budget deficit
Government spending is greater than tax revenue.
32 of 41
Budget surplus
Tax revenue is greater than government spending.
33 of 41
Multiplier effect
A process by which an original change in incomes in the economy leads to a total change in incomes which is a multiple of the original change.
34 of 41
Money
Anything that is generally acceptable as a medium of exchange.
35 of 41
Banks and building societies
Financial institutions that accept deposits and make loans.
36 of 41
Interest rate
The reward for saving and the cost of borrowing.
37 of 41
Monetary policy
A policy aimed at affecting the total supply of money in the economy.
38 of 41
Interest rate policy
The use of interest rates to try to achieve the government's economic objectives.
39 of 41
Bank rate
The interest rate set by the Bank of England, which affects all interest rates in the economy (also called the base rate).
40 of 41
Supply-side policies
Policies that increase the ability of the economy to supply more goods and services.
41 of 41

Other cards in this set

Card 2

Front

Growth in output of the economy over time - a growth of real GDP over time.

Back

Economic growth

Card 3

Front

The total value of goods and services produced in the country in a year.

Back

Preview of the back of card 3

Card 4

Front

GDP divided by the total population, therefore GDP per head.

Back

Preview of the back of card 4

Card 5

Front

When all those able and willing to work are in paid employment at the current wage rate.

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

EU
See all Economics resources »See all Unit 2 resources »