Economics 0455 keywords

Scarcity

limited resources versus unlimited wants

Opportunity cost

The cost of the next best alternative forgone

Factors of production

Land, Labour, Capital and Enterprise

Economic goods

goods with opportunity cost

Free good

Good with no opportunity cost

Production possibility curve

Graph showing possible output combination

Specialisation

Focusing on one task to improve efficiency

Sustainability

Meeting current needs without harming future

Market economy

Decisions by buyers and sellers

Planned economy

Government controls resources

Mixed economy

Combination of market and planning

Demand

The quantity a consumer is willing and able to buy

Supply

Quantity suppliers are willing and able to supply

Equilibrium price

Price where demand equals supply

Price mechanism

How price allocate resources

Market failure

Market does not allocate resources efficiently

Externalities

cost/benefit on third parties

Trade union

worker organisation for better pay

commercial bank

provides saving and loans

Central bank

controls money supply and interest rate

Insurance

protection against financial risk

Prvt limited company

shares held privately

public limited company

shares held publicly

dividends

shareholders’ portion of profit

GDP

total value of goods and services produced

inflation

sustained rise in prices

deflation

sustained fall in prices

recession

decline in economic activity

Fiscal policy

Taxation and gov spending

Monetary policy

Control of money supply and interest rates

Exchange rate

price of one currency in terms of another

Budget deficit

spending exceeds revenue

Budget surplus

revenue exceeds spending

Public debt

total gov borrowing

interest rates

cost of borrowing

BoP

record of international transactions

unemployment

people willing but unable to find work

Living standards

Quality of life and well being

Relative poverty

below average income lvl

absolute poverty

inability to meet basic needs

Econ growth

increase in national output

investment

spending on capital goods

Sustainable development

growth without depleting resources

dependency ratio

non-working vs working population ratioi

income inequality

unequal income distribution

productivity

output per unit of input

Protectionism

policies restricting imports

tariffs

taxes on imports

quotas

limits on imported goods

globalisation

integration of economies worldwide

exchange rates

price of one currency in another

Balance of trade

exports minus imports

current account

trade in goods/service balance

trade surplus

export exceeds imports

trade deficit

imports exceed exports

Foreign direct investment

investment from abroad