IGCSE Economics Unit 4 Questions
and Answers
Aggregate Supply - ANSWER-Total Supply in the economy.
Balance of Payments (BOP) - ANSWER-The measure of financial transactions that one
country has with the rest of the world.
Balanced Budget - ANSWER-Government income = government expenditure
Basket of Goods - ANSWER-A variety of goods and services that stays the same from
month to month and is used to construct the CPI.
Budget - ANSWER-Government income & government expenditure for a 1 year period.
Budget deficit - ANSWER-Government expenditure is greater than its income for that
year.
Budget surplus - ANSWER-Government income is greater than its expenditure for that
year.
Circular flow of income - ANSWER-Model showing the flow of money, factors of
production & goods/services in the economy.
Consumer Price Index (CPI) - ANSWER-very similar to the RPI - increasingly the
measure of choice for Governments.
Direct taxes - ANSWER-Taxation on income and wealth (income tax, corporation tax,
inheritance tax, capital gains tax).
Economic growth - ANSWER-The increase of total production or expenditure in an
economy
Exporters - ANSWER-Firms that sell goods and services to the rest of the world.
Fiscal policy - ANSWER-Use of taxation and government spending to influence the
economy.
Frictional unemployment - ANSWER-unemployment associated with people that are
between jobs.
Full employment - ANSWER-everybody who is willing and able to work is in
employment.
and Answers
Aggregate Supply - ANSWER-Total Supply in the economy.
Balance of Payments (BOP) - ANSWER-The measure of financial transactions that one
country has with the rest of the world.
Balanced Budget - ANSWER-Government income = government expenditure
Basket of Goods - ANSWER-A variety of goods and services that stays the same from
month to month and is used to construct the CPI.
Budget - ANSWER-Government income & government expenditure for a 1 year period.
Budget deficit - ANSWER-Government expenditure is greater than its income for that
year.
Budget surplus - ANSWER-Government income is greater than its expenditure for that
year.
Circular flow of income - ANSWER-Model showing the flow of money, factors of
production & goods/services in the economy.
Consumer Price Index (CPI) - ANSWER-very similar to the RPI - increasingly the
measure of choice for Governments.
Direct taxes - ANSWER-Taxation on income and wealth (income tax, corporation tax,
inheritance tax, capital gains tax).
Economic growth - ANSWER-The increase of total production or expenditure in an
economy
Exporters - ANSWER-Firms that sell goods and services to the rest of the world.
Fiscal policy - ANSWER-Use of taxation and government spending to influence the
economy.
Frictional unemployment - ANSWER-unemployment associated with people that are
between jobs.
Full employment - ANSWER-everybody who is willing and able to work is in
employment.
