Key Terms - Economics A Level

Define productivity

Output per worker per hour

Define agglomeration

When production is cheaper because of this clustering of economic activity

What does PPF stand for?

Production possibilities frontier

Define Aggregate Demand

The total of all demands or expenditures in the economy at any given price

Define Aggregate Supply

The sum of all industry supply in the economy

Define Animal Spirits

The mood of managers and owners of firms about the future of their industry and the wider economy, and how this emotion can drive decision making

What is the Balance of payments account?

A record of all financial dealings over a period of time between economic agents of one country and all other countries

What is the Balance of trade?

The value of visible exports minus visible imports

Define underemployed

Those who would work more hours if available or are in jobs which are below their skill level

Define Frictional unemployment

When workers are unemployed for short lengths of time between jobs

Define Cyclical/ demand-deficient unemployment

When there is insufficient demand in the economy for all workers who wish tow ork at current wage rates to obtain a job

What is the claimant count?

A means that measures unemployment by counting the number of people claiming benefits for being unemployed

What are the two ways in which unemployment is calculated?

Using the Claimant count and the Labour Force Survey (LFS)

How does the Labour Force Survey (LFS) calculate unemployment?

Each month 44,000 households with over 100,000 individuals are surveyed, then to be classified as unemployed, an individual has to be without paid job, be able to start a job within a fortnight, and has either looked for work at some work at some time in the previous four weeks or be waiting to start a job already obtained