IGCSE Economics 0455 Questions and
Answers Graded A+
Aggregate Supply (AS) - ANSWER-The total supply of goods and services in an
economy
Balance Of Payments - ANSWER-A record of the flows of money into and out of a
country
An annual financial record of a country's transactions with the rest of the world
Balance Of Trade/Trade Balance - ANSWER-The difference between a country's total
export earnings and its total import expenditure
Basic Pay - ANSWER-The amount of money received before any additional payments
are added or any deductions, such as income tax, are made
Boom - ANSWER-A period of high and rising real GDP in the economy over time
Business Confidence - ANSWER-The extent to which businesses feel optimistic about
the future: if business confidence is high, producers are likely to invest more in capital
equipment to expand output
Capital Goods - ANSWER-Equipment and machinery purchased and used by firms for
the purpose of increasing production of goods and services
Central Bank - ANSWER-The bank of the government which is responsible for
controlling a country's money supply, issuing notes and coins and setting the rules
commercial banks must follow
Characteristics Of Perfect Competition - ANSWER-- Firms sell an identical product
Claimant Count - ANSWER-A measure of unemployment that is calculated by counting
all individuals who receive an unemployment benefit as being unemployed; those
actively
seeking work and claiming benefit
Collective Bargaining - ANSWER-The act of negotiation between a trade union
representative on behalf of its members and the employer in order to reach an
agreement which both sides find acceptable
, Consumer Confidence - ANSWER-The extent to which consumers feel optimistic about
the future: if the consumer confidence is high, consumers are likely to spend more and
save less
Consumer Goods - ANSWER-Final goods and services purchased and used by
consumers
Consumer Prices Index (CPI) - ANSWER-A measure of the changes in the prices of a
selection of goods and services normally purchased by a typical (ordinary household)
Cost Of Living - ANSWER-The day-to-day expenses incurred by an individual
Current Account - ANSWER-Part of the balance of payments that records exports and
imports of goods and services between a country and the rest of the world
Current Account Deficit - ANSWER-This occurs when a country spends more money
than it earns, i.e, import expenditure exceeds export earnings
Current Account Surplus - ANSWER-This exists if
Cyclical - ANSWER-This type of unemployment occurs when GDP growth rate. So
when GDP growth is small (or negative) unemployment is high
Deflation - ANSWER-The sustained fall in the general level of prices of goods and
services in an economy over a period of time
Dependent Population - ANSWER-- The dependent population of a country consists of
people who do not earn an income themselves and rely on others to provide them with
goods and services they need
- It includes young children, the elderly, people who cannot work due to illness or
disability, as well as those in full-time education
Depreciation - ANSWER-A fall in the value of a currency due to market forces
Deregulation - ANSWER-The removal of laws, rules and regulations, making it easier
for a business to enter or operate in an industry
Deruglation - ANSWER-The removal of laws, rules and regulations, making it easier for
a business to enter or operate in an industry
Earnings - ANSWER-The total amount received including additional payments
Economic Cycle/Business Cycle/Trade Cycle - ANSWER-Changes in the real GDP of
an economy over time through periods of boom, recession, slump and recovery
Answers Graded A+
Aggregate Supply (AS) - ANSWER-The total supply of goods and services in an
economy
Balance Of Payments - ANSWER-A record of the flows of money into and out of a
country
An annual financial record of a country's transactions with the rest of the world
Balance Of Trade/Trade Balance - ANSWER-The difference between a country's total
export earnings and its total import expenditure
Basic Pay - ANSWER-The amount of money received before any additional payments
are added or any deductions, such as income tax, are made
Boom - ANSWER-A period of high and rising real GDP in the economy over time
Business Confidence - ANSWER-The extent to which businesses feel optimistic about
the future: if business confidence is high, producers are likely to invest more in capital
equipment to expand output
Capital Goods - ANSWER-Equipment and machinery purchased and used by firms for
the purpose of increasing production of goods and services
Central Bank - ANSWER-The bank of the government which is responsible for
controlling a country's money supply, issuing notes and coins and setting the rules
commercial banks must follow
Characteristics Of Perfect Competition - ANSWER-- Firms sell an identical product
Claimant Count - ANSWER-A measure of unemployment that is calculated by counting
all individuals who receive an unemployment benefit as being unemployed; those
actively
seeking work and claiming benefit
Collective Bargaining - ANSWER-The act of negotiation between a trade union
representative on behalf of its members and the employer in order to reach an
agreement which both sides find acceptable
, Consumer Confidence - ANSWER-The extent to which consumers feel optimistic about
the future: if the consumer confidence is high, consumers are likely to spend more and
save less
Consumer Goods - ANSWER-Final goods and services purchased and used by
consumers
Consumer Prices Index (CPI) - ANSWER-A measure of the changes in the prices of a
selection of goods and services normally purchased by a typical (ordinary household)
Cost Of Living - ANSWER-The day-to-day expenses incurred by an individual
Current Account - ANSWER-Part of the balance of payments that records exports and
imports of goods and services between a country and the rest of the world
Current Account Deficit - ANSWER-This occurs when a country spends more money
than it earns, i.e, import expenditure exceeds export earnings
Current Account Surplus - ANSWER-This exists if
Cyclical - ANSWER-This type of unemployment occurs when GDP growth rate. So
when GDP growth is small (or negative) unemployment is high
Deflation - ANSWER-The sustained fall in the general level of prices of goods and
services in an economy over a period of time
Dependent Population - ANSWER-- The dependent population of a country consists of
people who do not earn an income themselves and rely on others to provide them with
goods and services they need
- It includes young children, the elderly, people who cannot work due to illness or
disability, as well as those in full-time education
Depreciation - ANSWER-A fall in the value of a currency due to market forces
Deregulation - ANSWER-The removal of laws, rules and regulations, making it easier
for a business to enter or operate in an industry
Deruglation - ANSWER-The removal of laws, rules and regulations, making it easier for
a business to enter or operate in an industry
Earnings - ANSWER-The total amount received including additional payments
Economic Cycle/Business Cycle/Trade Cycle - ANSWER-Changes in the real GDP of
an economy over time through periods of boom, recession, slump and recovery
