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Economics
Economics
51
Economics
9th Grade
09/24/2024
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Term
Average revenue
 Definition
Average income from the sales of each individual good
Term
Appreciation
 Definition
When the value of one currency rises in value to another.
Term
Balance of payments
 Definition
A record of all financial transactions between the UK and the rest of the world.
Term
Balance of Payments Deficit
 Definition
When the value of the UK’s exports of goods and services are less than the value of imported goods and services. X > M.
Term
Balance of Payments surplus
 Definition
When the UK’s exports of goods and services are greater than the values of imported goods and services. X > M.
Term
Balance of trade
 Definition
he part of the current account that records the sales and purchase of physical items between the UK and the rest of the world.
Term
Barriers to entry
 Definition
Circumstances that could prevent a firm from successfully joining a market (selling a particular good or service).
Term
Base rate
 Definition
The interest rate set by the bank of England that influences market interest rates.
Term
Budget deficit
 Definition
When government spending is greater than tax revenue (spending > tax).
Term
Budget surplus
 Definition
When government tax revenue exceeds expenditure (tax > spending).
Term
Building societies
 Definition
A financial institution which is entirely owned by its members. It offers banking and other financial services to these members.
Term
Capital
 Definition
The machinery and tools used in the creation of goods and services. This could include a factory or a coffee machine. The payment for capital is interest. (This is usually because it is purchased using borrowed money.)
Term
Claimant account
 Definition
Measures unemployment by the number of individuals claiming unemployment benefit that week.
Term
Commercial banks (also known as high street or retail banks)
 Definition
These look to make profits by selling financial services to households and businesses.
Term
Competitive market
 Definition
A market where a wide variety of producers are competing with each other to supply goods and services.
Term
Complimentary goods
 Definition
Two goods which are often consumed together. Examples could include strawberries and cream or milk and cereal.
Term
Consumers
 Definition
A person who purchase goods and services for personal use.
Term
Consumer price index (CPI)
 Definition
Measuring inflation by taking the average weighted price level of a basket of goods and comparing it between years.
Term
Cost push inflation
 Definition
When inflation is caused by an increase in the costs of production. For example, an increase in wages or the cost of raw materials.
Term
Current account
 Definition
The part of the balance of payments which records the exchange of goods and services between the UK and the rest of the world.
Term
Cyclical unemployment (often called demand deficient unemployment)
 Definition
Unemployment caused by a lack of demand for goods and services (the economy is in a recession or slump).
Term
Deferred payment
 Definition
Agreement between the lender and borrower allowing the borrower to pay for goods immediately and make payments in the future.
Term
Demand
 Definition
The quantity of a good or service that consumers are willing and able to buy at a given price and a given time period.
Term
Demand curve
 Definition
A curve showing the quantity demanded for a good or service at any given price level.
Term
Demand pull inflation
 Definition
When inflation is caused by an increase in demand for goods and services within an economy (this often occurs during a recovery or boom stages of the economic cycle).
Term
De-merit goods
 Definition
Goods which are worse for the consumer than they perceive and so are over consumed by the market. An example of this would be consumption of fatty and sugary foods.
Term
Depreciation
 Definition
When the value of one currency falls in value to another.
Term
Deregulation
 Definition
The removal of regulations or restrictions on a particular business or industry.
Term
Developed countries
 Definition
A country with a relatively high level of economic growth and mature institutions and infrastructure.
Term
Direct taxation
 Definition
Taxes based on income such as income tax or national insurance contributions.
Term
Diseconomies of scale
 Definition
Where an increase in a firm’s output results in an increase in its average costs.
Term
Division of labour
 Definition
When production of a good or service is split into a number of smaller tasks and employees then specialise in completing each of these tasks with the intention of increasing productivity.
Term
Economic activity
 Definition
The making, producing, buying, selling or consuming products or services.
Term
Economic resource
 Definition
Resources which are scarce. Due to them being limited decisions will have to be made about how they are used within an economy.
Term
Economies of scale
 Definition
Where an increase in a firm’s output results in a fall in average costs. Note there is not requirement for students to know the relevant diagram for Economies of scale but teachers may choose to use this in order to aid teaching.
Term
Enterprise/entrepreneurship
 Definition
Individuals who take the factors of production and convert them into goods and services which can be sold for profit. The payment for enterprise is profit.
Term
Equilibrium price
 Definition
When demand for a good or service is equal to supply. When a market is in equilibrium then the price is likely to be stable.
Term
EU single market
 Definition
Refers to the European Union (EU) as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services
Term
Excess demand
 Definition
Where quantity demanded of a good or service exceeds supply, resulting in shortages and higher prices.
Term
Excess supply
 Definition
Where quantity supplied of a good or service exceeds demand, resulting in shortages and higher prices.
Term
Exchange
 Definition
Where buyers and sellers come together in a market place to negotiate prices.
Term
Exchanges rates
 Definition
The value of a currency in terms of another. For example, £1 = $1.2
Term
Factor markets
 Definition
The market for the factors of production; land, labour and capital.
Term
Financial economies of scale
 Definition
Firms being able to take advantage of lower interest rates as a result of their increased size. (Large firms can often borrow at a lower interest rate than smaller firms as they are considered a lower risk for lenders.)
Term
Fiscal policy
 Definition
The use of government spending and taxation in order to influences the level of demand within the Economy.
Term
Fixed costs
 Definition
Costs which do not change with output for example rent for a shop would be the same regardless of how many shoes it sold over the course of the month.
Term
Free trade
 Definition
Trade that takes place without tariffs or other barriers.
Term
Frictional unemployment
 Definition
This is caused by imperfect information where workers are unable to find work for their skill set.
Term
Full employment
 Definition
When all those who are fit, able and willing to work in the next two weeks are employed.
Term
Geographical immobility
 Definition
When workers are unable to move to new locations for work.
Term
Globalisation
 Definition
The process of growing economic integration between the world’s economies. Goods can be produced anywhere, sold anywhere and the profits stored anywhere globally.
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