Economics - A level - Edexcel A - Theme 2 - Key words Questions & Correct Answers/ Graded A+

Actual economic growth : The rate growth of GDP in a period Aggregate demand : The total amount of spending on goods and services produced in an economy during a period of time Aggregate demand curve : The relationship between the AD and the overall price level; it shoes planned expenditure at any given possible overall price level Automatic stabilisers : Effects by which government expenditure adjusts to offset the effects of recession and boom without the need for active intervention Average propensity to consume 2 : The proportion of income that households devote to consumption Balance of payments : Set of accounts showing transactions conducted between residence of a country and the rest of the world Bank rate : The interest rate that is set by the monetary policy committee of the BoE in order to influence inflation Business cycle : A phenomenon whereby GDP fluctuates around its underlying trend, following a regular pattern Capital productivity : A measure of output per unit of capital Circular flow of income, expenditure and output : A model of the economy which shows the movement of goods and services between households and firms and their corresponding payments in money terms 3 Claimant count of unemployment : The number of people claiming the Jobseekers allowance each month