Economics GCSE Topic 2.7-2.8 OCR

labour market

where workers sell their labour and employers buy the labour. Households supply labour and firms demand labour.

Wage rate

the price of labour, is determined by the interaction of supply and demand for labour.

Role of labour market

to enable workers who are willing and able to sell their labour to meet employers who are willing and able to offer them a job, and to determine the wage rate or salary for a job.

Trade Unions

an organisation of workers that is active on behalf of its members, for example increasing wages and salaries and negotiating better working condition

National Minimum Wage

the minimum pay per hours that workers are entitled to, set by the government.

Gross Income

the amount of money that an employee earns from work before deductions are made

Net Pay

gross income minus deductions from pay

National Insurance

a contribution paid by workers, and their employers towards the cost of state benefits

Money

anything that is generally accepted as a means of payment for goods and services. E.g. notes and coins (legal tender) and bank deposits (savings and current accounts)

Liquidity

ability to turn assets into cash in order to pay for goods and services

investment

the purchase of capital goods that are used to produce future goods and services. It is also an asset purchased to provide an income in the future and/or to be sold at a profit.

rate of interest/interest rate

the cost of borrowing money, i.e. that which is paid to the lender. Its also the reward for saving

Building Society

a mutual financial institution that is owned by its members. Its primrary objectives are to recieve deposits from its members and to lend money for members to purchase property.

Mortgage

an agreement with a financial institution to borrow money to purchase a property

savings

the part of a person’s income which is not spent on consumption. Saving are done by savers.

Borrowing

to recieve money from another party with the agreement that the money will be repaid.