1
Q
aggregate demand
A
the total sum of demand from all sources in the economy
2
Q
aggregate supply
A
total output supplied from all sources in the economy
3
Q
appreciation
A
occurs when the exchange rate rises, making imports cheaper and raising the price of exports
4
Q
balance of trade
A
the difference in value between visible exports and visible imports
5
Q
base rate
A
set by the Bank of England and influences interest rates across the economy
6
Q
Boom
A
a time of rapid growth and expansion in the economy
7
Q
BRICs
A
Stands for Brazil, Russia, India, China and South africa alll Emerging economies
8
Q
capacity utilisation
A
measures the actual output as a percentage of the theoretical maximum possible output
9
Q
capital
A
includes all assets that can generate income and includes premises, equipment and financial assets
10
Q
capital intensive production
A
uses large amounts of capital and relatively little labour
11
Q
common markets
A
have completely free trade internally and a common external trade policy covering the rest of the world
12
Q
comparative advantage
A
refers to the theory that if two countries specialise in the product which for them has the lowest opportunity cost, and then trade, real incomes will increase
13
Q
conglomerate integration
A
occurs when two businesses that have nothing in common join together
14
Q
constant prices
A
value every year’s output at the price levels of a base year, removing the effects of inflation
15
Q
Consumption
A
is total household spending on goods and services
16
Q
cost-push inflation
A
is caused by rising costs of production
17
Q
contractionary policies
A
slow down economic activity by increasing leakages and reducing injections into the circular flow of money
18
Q
cyclical unemployment
A
caused by a downturn in the economic cycle. Spending is falling so output falls and fewer employees are needded
19
Q
demand pull inflation
A
caused by excess aggregate demand. Quantity demanded exceeds total output
20
Q
depreciation
A
is a fall in the exchange rate that makes imports dearer and exports cheaper
21
Q
diseconomies of scale
A
happens when further increases in size begin to increase average costs and inefficiencies develop
22
Q
disposable income
A
the amount of income a person can actually spend on goods and services. It measures consumers’ spending power after tax
23
Q
downturn
A
the stage of the economic cycle when the boom slows and the rate of growth of GDP decreases
24
Q
economic cycle
A
the fluctuations in the levels and rates of growth of GDP over a time period. It is sometimes referred to as the trade or business cycle.
25
economies of scale
leads to a reduction in average costs brought about by an increase in the size of a business
26
efficiency
means organising production so that waste is minimised and costs are the lowest possible
27
emerging economies
have fast growing manufacturing sectors Some are still poor but others e.g. Mexico may soon be described as developed.
28
employment
refers to all those people of working age who have jobs
29
expansionary policies
stimulating the level of economic activity by reducing leakages and increasing injections into the circular flow of money
30
extension strategies
are ways of lengthening the maturity stage of the product life cycle
31
external economies of scale
reduce production costs for all businesses in the industry
32
fiscal policy
adjusts taxation and government expenditure either to stimulate or to cool down the economy
33
foreign direct investment
refers to funds invested in other economies
34
free trade areas
groups of countries that trade completely freely with each other, with no trade barriers, but each member country retains its own independent trade policies in relation to the rest of the world.
35
globalisation
refers to the increasing interdependence of trading economies with increased imports, exports and capital movements
36
horizontal integration
means that two businesses in the same industry have joined together
37
human capital
the knowledge, experience anf skills of individuals or of the workforce.
38
income elastic
applies to products for which an income change causes a proportionately bigger change in quantity demanded
39
income inelastic
applies to products for which an income change causes a proportionately smaller change in quantity demanded
40
income elasticity of demand
measures the proportionate change in quantity demanded following a change in income
41
inferior good
a good or service that sees an increase in demand following a fall in income and a fall in demand following an increase in income
42
inflation
measured using either CPI the headline rate and the basis for the governments inflation target, or RPI which includes housing costs e.g. council tax and mortgage interest payments
43
injections
investment, government expenditure and exports - increase demand for domestically produced goods and services.
44
inorganic growth
the firm grows by joining with another firm by merger or takeover
45
internal economies of scale
are those that benefit the individual business
46
investment
spending now on capital assets that will generate income in the future
47
invisible imports/exports
cannot be touched or handled; they are services e.g. insurance, banking or tourism
48
just in time
stock control system that orders stock in just as the business needs it
49
kaizen
japanese word for continuous improvement. It summarises a whole company approach to quality control
50
Keynes, J.M
the highly influential economist who in the 1930s explained the importance of maintaining levels of aggregate demand during recessions
51
labour intensive production
uses large amounts of labour and relatively little capital
52
Lead time
the time taken from having an idea to selling the product to a customer
53
leakages
reduce the demand for domesticlaly produced goods and services by diverting part of people's income into savings, taxes and spending on imports
54
lean production
refers to any system of production that minimises costs through eliminating waste
55
long tail
the mass of niche markets that has vastly extended consumer choice, with many smaller and larger businesses providing for small groups of consumers
56
market leader
the business with the most control over prices and output within its market
57
marketing mix
the range of marketing strategies that businesses use to promote and sell their products or services. It includes pricing, design and all forms of advertising
58
market power
exist when a successful business with a significant market share can influence prices and output in the market
59
mean income
is average income i.e. total income (GDP) divided by the populaion
60
median income
the middle value in all incomes 50% of incomes are above it and 50% below it
61
merger
is the joining of two or more firms into a single business with the approval of the shareholders and management concerned
62
micromarketing
the marketing of products or services designed to meet the needs of a very small section of the market
63
minimum efficient scale
the lowest point on the average cost curve where all available economies of scale have been put to use
64
monetary policy
uses interest rates to control the level of spending in the economy
65
monopoly power
when a business is big enough to behave like a monopoly and control price or quantity supplied
66
monopsony
occurs when there is only one buyer of a product or service
67
monopsony power
when a firm is the only buyer or is big enough to behave like a monopsony. This means that it can drive down the price of inputs simply by refusing to pay any more
68
Multinational corporations
businesses that are active in more than one economy
69
nominal value
means that the value is expressed in numerical terms at current prices
70
normal goods
any good or service for which quantity demanded rises when incomes rise and falls when incomes fall
71
oligopoly
occurs when several large firms grows from within using its own resources to expand output
72
organic growth
the firm grows from within using is own resources to expand output
73
outsourcing
means buying inputs from independent suppliers, or locating the whole production process abroad
74
physical capital
any buildings, tools and equipment that will help to generate output
75
price elastic
a price change causes a proportionately bigger change in quantity demanded
76
price inelastic
a price change causes a proportionately smaller change in quantity demanded
77
PED
measured the extend to which a change in price affects quantity demanded.
78
pricing strategy
the way in which a business decides on the price to charge and the factors that influence that decision
79
productivity
described how efficiently resources are actually being used, usually by looking at output per unit of input
80
product innovation
occurs when a completely new or improved product or service is created
81
process innovation
occurs when new or improved production methods are used, enhancing efficiency and reducing costs
82
product life cycle
the stages a product passes through, from an initial idea to the end of its life
83
promotion
the use of advertising, branding, and public relations to increase sales
84
public sector deficit
occurs when government spending exceeds tax revenue and it borrows to fund the difference
85
quality control
refers to the traditional method of checking that products are of an adequate standard.
86
quality assurance
means ensuring that quality standards are agreed and met throughout the organisation
87
real value
means that the effects of inflation have been removed. Real value is nominal value minus the inflation rate
88
recession
occurs when there are at least two consecutive quarters of negative GDP growth
89
recovery
follows recession, GDP growth rises slowly at first, then gathers pace. If it then grows faster, it may lead to a boom
90
resources
include land, labour, capital, enterprise
91
SME
is the recognised abbreviation for small and medium sized enterprises
92
structural unemployment
happens when people have the wrong skills for the employment on offer, or are located too far away from the available job
93
supply chain
the sequence of processes by which a final product is created/ Often this involves many different suppliers, perhaps in a range of different locations
94
supply side policies
designed to increase the productive capacity of the economy by influencing aggregate supply
95
synergy
sometimes he combination of two businesses that have merged will yield more than the expected results often illustrated as 2+2=5`
96
takeover
when one firm makes a big for another and secures over 50% of the shares. That firm effectively swallows up the other one
97
team working
employees are organised into teams that share responsibility for production
98
TQM
refers to employees being involved in quality control and taking responsibility for the quality of their and their teams work
99
uncertainty
describes a situation where events are unpredictable and beyond the control of the business
100
unemployment
refers to the number of people ale and willing to work but not able to find a paying job. The claimant count measures unemployment based on the number of people claiming unemployment benefits. The ILO or LFS measure of unemployment counts all those who are available and looking for work
101
underemployment
refers either to employed people whose work foes not make full use of their qualifications or to hose forced to take part-time employment
102
vertical integration
means that two businesses in the same industry, but at different stages of the production process to supply chain, have joined together
103
viral marketing
spreads product information from person to person as individuals pass messages on via social media, text or email.
Economics
flashcards
Decks in class (47)
# Cards
-
2.1.1 Growth36
-
2.1.2 Methods of growth16
-
2.1.3 R&D and innovation15
-
2.1.4 How the digital economy affects markets and firms12
-
2.1.5 How small firms compete10
-
2.2.1 Price elasticity of demand22
-
2.2.2 Competing on price14
-
2.2.3 Types of non-price competition2
-
2.2.4 Income elasticity of demand11
-
2.3.1 Productivity8
-
2.3.2 Capacity utilisation10
-
2.3.3 Efficiency and competitiveness using lean production20
-
2.3.4 Impact on costs and sales revenue3
-
2.4.1 Globalisation11
-
2.4.2 Developed, emerging and developing economies12
-
2.4.3 International trade13
-
2.4.4 Exchange rates3
-
2.5.1 Economic cycle10
-
2.5.2 Circular flow of income, expenditure and output12
-
2.5.3 Inflation14
-
2.5.4 Employment and unemployment13
-
2.6.1 Possible macroeconomic objectives7
-
2.6.2 Policy instruments13
-
2.6.3 Potential policy conflicts and trade-offs5
-
3.1.1 Growing economies15
-
3.1.2 Trade and growth12
-
3.1.3 Trading blocs9
-
3.1.4 Trade policy and trade negotiations11
-
3.1.5 The impact of exchange rate change7
-
3.2.1 Economic factors in business expansion5
-
3.2.2 assessing the potential of different economies5
-
3.3.1 Responding to global demand6
-
3.3.2 Demand-side factors in global markets5
-
3.4.1 Impact of globalisation on local and national economies7
-
3.4.2 Ethical issues7
-
3.4.3 Controlling MNCs6
-
3.5.1 Employment paterns3
-
3.5.2 Wage rates6
-
3.5.3 Minimum wage legislation8
-
3.6.1 Poverty and inequality4
-
3.6.2 Reducing poverty8
-
3.6.3 The impact of inequality on economic agents4
-
3.6.4 Re-distribution of income and wealth8
-
4.1.1 Spectrum of competition16
-
4.2.1 Market failure3
-
keywords theme 365
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keywords theme 2103
