IGCSE Econ terms

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233 Terms

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absolute poverty
where people do not have enough resources to meet all of their basic human needs
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administration
activities involved with managing in and organising work the work of a company or organisation
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aggregate demand
total demand in the economy including consumption, investment, government expenditure and exports mins imports
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aggregate supply
total amount of goods and services produced in a country at a given price level in a given price
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anti-competitive practices
attempts by firms to prevent or restrict competition
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appreciation
where the value of a currency rises due to market forces
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assembly plants
factory where parts are put together to make a final product
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assets
things or resources belonging to an individual or a business that has value or the power to earn money
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austerity
official action taken by a government in order to reduce the amount of money that it spends or the amount that people spend
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balance of payments
record of all transactions relating to international trade
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balance of trade / visible balance
difference between visible exports and visible imports
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barriers to entry
obstacles that might discourage a firm from entering a market
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base rate
rate of interest set by government or regional central banks for lending to other banks, which in turn influences other rates in the economy
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basic economic problem
allocation of a nation’s scarce resources between competing uses that represent infinite wants
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bi-lateral trade agreement
trade deal between only two countries
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boom
peak of the economic cycle where GDP is growing at its fastest; time when business activity increases rapidly, so that the demand for goods increases, prices and wages go up, an unemployment falls
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boom and bust
when an economy regularly becomes more active and successful and then suddenly falls
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budget
government’s spending and revenue plans for the next year
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budget deficit
amount by which government spending is greater than government revenue
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bulk buying
buying goods in large quantities, which is usually cheaper than buying in small quantities
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capital and financial account
that part of balance of payments where flows of savings, investment and currencies are recorded
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capital goods
those purchased by firms and used to produce other goods such as factories machinery, tools and equipment
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capital intensive
production that relies more heavily on machinery relative to labour
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cartel
where a group of firms or countries join together and agree on pricing or output levels in the market
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closed shop
company or factory where all the workers must belong to a particular trade union
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commodities
product that can be sold to make a profit
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competition
rivalry that exists between firms when trying to sell goods to the same group of customers
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complementary goods
goods purchased together because they are consumed together
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consumer goods
those purchased by households, such as food, confectionery, cars, tablets and furniture
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consumer price index
measure of the general price level (excluding housing costs)
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consumption
amount of goods, services, energy or natural materials used in a particular period of time
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contractionary fiscal policy
fiscal measures designed to reduce demand in the economy
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cost-push inflation
inflation caused by rising business costs
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costs
expenses that must be met when setting up and running a business
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current account
parts of balance of payments where all exports and imports are recorded
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current account deficit
when value of imports exceeds the value of exports
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current account surplus
when value of exports exceeds the value of imports
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current balance
difference between total exports and total imports
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cyclical / demand deficient unemployment
unemployment caused by falling demand as a result of a downturn in the economic cycle
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de-industrialisation
decline in manufacturing
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deflation
period where the level of aggregate demand is falling
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demand curve
line drawn on a graph that shows how much of a good will be bought at different prices
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demand schedule
table of the quantity demanded of a good at different price levels - can be used to calculate the expected quantity demand
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demand-pull inflation
inflation caused by too much demand in the economy relative to supply
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depreciation
where the value of a currency falls due to market force
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depression
bottom of the economic cycle where GDP starts to fall with significant increases in unemployment
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derived demand
demand that arises because there is demand for another good
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devaluation
when a government fixes a new lower exchange rate
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direct taxes
taxes levied on the income earned by firms and individuals
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discretionary expenditure
non-essential spending or spending that is not automatic
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diseconomies of scale
rising average costs when a firm becomes too big
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disposable income
income that is available to someone over a period of time to spend
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diversified
if a company or economy diversifies, it increases the range of goods and services it produces
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dividend
part of a company's profit that is divided among the people with shares in the company
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division of labour
breaking down of the production process into small parts with each worker allocated to a specific task
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downturn
period in the economic cycle where GDP grows, but more slowly
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dumping
where an overseas firm sells large quantities of a product below cost in the domestic market
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economic growth
increase in the level output by a nation
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economies of scale
falling average costs due to expansion
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economy
system that attempts to solve the basic economic problem
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effective demand
amount of a good people are willing to buy at given prices over a given period of time supported by the ability to pay
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elastic demand
change in price results in a greater change in the quantity demanded
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elastic supply
change in price results in a proportionately greater change in the quantity supplied
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embargo
official order to stop trade with another country
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enterprises
companies, organisations or businesses
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entrepreneurs
individuals who organise the other factors of production and risk their own money in a business venture
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equilibrium price
price at which supply and demand are equal
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excess demand
where demand is greater than supply and there are shortages in the market
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excess supply
where supply is greater than demand and there are unsold goods in the market
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exchange rate
price of one currency in terms of another
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excise duty
government tax on certain goods, such as cigarettes, alcoholic drinks and petrol that are sold in the country
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expansionary fiscal policy
fiscal measures designed to stimulate demand in the economy
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expenditure
spending by a government, usually a national government
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exports
goods and services sold overseas
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external benefits
positive spillover effects of consumption or production - they bring benefits to third parties
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external costs
negative spillover effects of consumption or production - they affect third parties in a negative way
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external economies of scale
cost benefits that all firms in an industry can enjoy when the industry expands
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factors of production
resources used to produce goods and services, which include land, labour, capital and enterprise
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fast-moving consumer good
goods, especially food, that sell very quickly and in large amounts
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finite
having an end or a limit
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fiscal deficit
amount by which government spending exceeds government revenue
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fiscal policy
decisions about government spending, taxation and levels of borrowing that affect aggregate demand in the economy
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fiscal surplus
amount by which government revenue exceeds government spending
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fit for purpose
usable (by a consumer) for the purpose for which it was intended
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fixed capital
stock of 'man-made' resources, such as machines and tools, used to help make goods and services
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fixed costs
costs that do not vary with the level of output
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foreign exchange market
market where foreign currencies can be bought and sold
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free rider
individual who enjoys the benefit of a good but allows others to pay for it
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free trade
situation in which the goods coming into or going out of a country are not controlled or taxed
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frictional unemployment
when workers are unemployed for a short period of time as they move from one job to another
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globalisation
growing interconnection of the world's economies
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goods
things that are produced in order to be sold
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gross domestic product
market value of all final goods and services produced in a period (usually yearly), an internationally recognised measure of national income
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hostile takeover
takeover that the company being taken over does not want or agree to
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human capital
value of the workforce or an individual worker
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hyperinflation
very high levels of inflation; rising prices get out of control
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imports
goods and services bought from overseas
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income elasticity of demand
responsiveness of demand to a change in income
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income inequality
differences in income that exist between the different groups of earners in society, that is, the gap between the rich and the poor
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indirect taxes
taxes levied on spending inelastic demand, such as VAT