10.A-level Economics Edexcel keywords

what are the factors that impact investment

interest rates, rising demand, rates and technological change /competition

what are factors that impact government spending

fiscal policy, economic system, e4conomic cycle

what are factors that impact net exports

exchange rates, foreign real investment, international competitiveness

what is real disposable income

the money value of household income adjusted for the effects of price changes (inflation)

what type of relationship does real disposable income and consumption have

a positive relationship

what is saving

deferred consumption, instead of spending now, spend later

what does YD (disposable income) equal to

consumption + saved

what does S(saving) equal to

disposable income (YD) - Consumption (C)

how can changes in savings behaviour affect AD

as consumers save more, they spend less (inverse relationship)

what can happen if interest rates rise

more incentive to save (consumers)

fall in average house prices

what can happen if interest rates lower

increase the disposable income of homeowners

less incentive to save

what is the negative wealth effect

when a decline in an individual's or household's wealth leads to reduced consumer spending

what is gross investment spending

total investment on new capital inputs

what is net investment

gross investment adjusted for capital consumption

what could happen if interest rates rise, to investment

investment is likely to fall

how can risk influence investment for a business

if it is high then a business will likely spend less

how can the rate of growth of demand influence investment

investment tends to be stronger when consumer spending is rising

what is the accelerator effect

how changes in national income (GDP) influence the level of investment

give examples of the accelerator effect

investment in 4G mobile networks, capital investment in renewable energy

how can corporate taxes and other govt policies affect investment

if corporation tax is lower then there is a greater incentive to invest