9 A-level Economics Edexcel keywords

what is standard of living

a measure of material welfare including quality of life and economic welfare

is Real GDP per capita accurate

inaccurate and insufficient indicator

what is economic welfare

the overall quality of life and material prosperity enjoyed by individuals and households

what is subsistence farming

when people consume their own food instead of buying food

what are remittances

sum of money sent as a payment of gift

what is subjective happiness

the self reported levels of happiness with ones life, usually determined using questionnaires

what is the eastern paradox

whether people are happier when our real standards of living improve

what is fiscal drag

when peoples wages/incomes rise in nominal terms causing them to pay more in direct/indirect tax

what is the wage price spiral

a price rise can lead to higher wage demands to maintain real standard of living

what is shoe leather costs

when prices are unstable there is an increase in search times - increases opportunity cost of holding money so more visits to bank (wearing out your shoe leather)

what are menu costs

extra costs to firms of changing price information especially if shown in catalogues / menu’s

what is trade balance

when inflation results in a trade deficit so country’s exports are less competitive

what is trade and unemployment

labour is a derived demand so as there is a decrease in demand more people become unemployed

what is the redistribution of incomes

the erosion of real value of incomes especially for those not in trade unions / weaker bargaining positions

what is the general price of inflation

2%

what is the Balance of Payments

a record of all the UK’s international financial transactions made between consumers, firms and government in a country

what does the balance of payments DO

summarises all transactions between residents of a nation and non-residents

what is included in the balance of payments

value of : trade flows, investment incomes and other financial transactions

what are he 4 components of the balance of payments

current, financial and capital account and foreign exchange reserves

what does the current account consist of

the balance of trade in goods and services plus net investment incomes from overseas assets and net transfers​