Pearson Edexcel AS/A-level BIOLOGY
Aggregate Demand (AD) - ANSWER The total demand/spending in an economy at
a given price level over a given period of time. Made up of consumption, investment,
government spending and net external demand.
Aggregate Supply (AS) - ANSWER The total amount of goods and services that
can be supplied in an economy at a given price level over a given period of time.
Allocative efficiency - ANSWER Where the price of a good is equal to the price
consumers are willing to pay. This occurs when all resources are allocated
efficiently.
Automatic stabilisers - ANSWER Parts of fiscal policy that automatically react to
changes in the economic cycle.
Average Revenue (AR) - ANSWER The revenue per unit sold.
Balance of payments - ANSWER A record of the international transactions of an
economy.
Bank rate - ANSWER The official rate of interest set by the central bank (e.g. by the
Monetary Policy Committee of the Bank of England)
Budget deficit - ANSWER When government spending exceeds tax revenues.
Budget surplus - ANSWER When tax revenues exceed government spending.
Capital account of the balance of payments - ANSWER A part of the balance of
payments that shows transfers of non-monetary and fixed assets into and out of the
economy.
Cartel - ANSWER A group of products who collude to limit output in order to keep
prices high.
Central bank - ANSWER The institution responsible for issuing banknotes in an
economy, acting as a lender of last resort, and implementing monetary policy.
Ceteris paribus - ANSWER All other things remaining equal
Circular flow of income - ANSWER The flow of national output, income and
expenditure between firms and households.
Command economy - ANSWER An economy where only the government
determines the allocation of resources.
, Consumer surplus - ANSWER The difference between the price a consumer pays
and the price they were willing to pay.
Consumption - ANSWER The purchase of goods and services.
Cost-push inflation - ANSWER Inflation caused by rising costs of production.
Cross elasticity of demand (XED) - ANSWER A measure of the responsiveness of
demand of one good/service to a change in price of another good/service.
Current account of the balance of payments - ANSWER A part of the balance of
payments that consists of: trade in goods, trade in services, primary income and
secondary income.
Cyclical unemployment - ANSWER Unemployment caused by a lack of demand in
the economy.
Deflation - ANSWER The sustained fall in the average price of goods and services
in an economy over a period of time.
Demand-pull inflation - ANSWER Inflation caused by increased demand in the
economy.
Demand-side policy - ANSWER Government policy that aims to alter aggregate
demand in the economy.
Deregulation - ANSWER Removing government legislation that could restrict
competition.
Derived demand - ANSWER The demand for a good or service due to its use in
making another good or service.
Disinflation - ANSWER A fall in the rate of inflation.
Disposable income - ANSWER Income available for households to spend after their
tax obligations are fulfilled.
Economic cycle - ANSWER The fluctuation in actual growth rates over a period of
time.
Economic growth - ANSWER An increase in an economy's productive potential.
Economic Problem - ANSWER how to allocate scarce resources given unlimited
wants
Equilibrium - ANSWER Where supply equals demand in a market or economy.
Exchange rate - ANSWER The price of one currency expressed in terms of
another.
Aggregate Demand (AD) - ANSWER The total demand/spending in an economy at
a given price level over a given period of time. Made up of consumption, investment,
government spending and net external demand.
Aggregate Supply (AS) - ANSWER The total amount of goods and services that
can be supplied in an economy at a given price level over a given period of time.
Allocative efficiency - ANSWER Where the price of a good is equal to the price
consumers are willing to pay. This occurs when all resources are allocated
efficiently.
Automatic stabilisers - ANSWER Parts of fiscal policy that automatically react to
changes in the economic cycle.
Average Revenue (AR) - ANSWER The revenue per unit sold.
Balance of payments - ANSWER A record of the international transactions of an
economy.
Bank rate - ANSWER The official rate of interest set by the central bank (e.g. by the
Monetary Policy Committee of the Bank of England)
Budget deficit - ANSWER When government spending exceeds tax revenues.
Budget surplus - ANSWER When tax revenues exceed government spending.
Capital account of the balance of payments - ANSWER A part of the balance of
payments that shows transfers of non-monetary and fixed assets into and out of the
economy.
Cartel - ANSWER A group of products who collude to limit output in order to keep
prices high.
Central bank - ANSWER The institution responsible for issuing banknotes in an
economy, acting as a lender of last resort, and implementing monetary policy.
Ceteris paribus - ANSWER All other things remaining equal
Circular flow of income - ANSWER The flow of national output, income and
expenditure between firms and households.
Command economy - ANSWER An economy where only the government
determines the allocation of resources.
, Consumer surplus - ANSWER The difference between the price a consumer pays
and the price they were willing to pay.
Consumption - ANSWER The purchase of goods and services.
Cost-push inflation - ANSWER Inflation caused by rising costs of production.
Cross elasticity of demand (XED) - ANSWER A measure of the responsiveness of
demand of one good/service to a change in price of another good/service.
Current account of the balance of payments - ANSWER A part of the balance of
payments that consists of: trade in goods, trade in services, primary income and
secondary income.
Cyclical unemployment - ANSWER Unemployment caused by a lack of demand in
the economy.
Deflation - ANSWER The sustained fall in the average price of goods and services
in an economy over a period of time.
Demand-pull inflation - ANSWER Inflation caused by increased demand in the
economy.
Demand-side policy - ANSWER Government policy that aims to alter aggregate
demand in the economy.
Deregulation - ANSWER Removing government legislation that could restrict
competition.
Derived demand - ANSWER The demand for a good or service due to its use in
making another good or service.
Disinflation - ANSWER A fall in the rate of inflation.
Disposable income - ANSWER Income available for households to spend after their
tax obligations are fulfilled.
Economic cycle - ANSWER The fluctuation in actual growth rates over a period of
time.
Economic growth - ANSWER An increase in an economy's productive potential.
Economic Problem - ANSWER how to allocate scarce resources given unlimited
wants
Equilibrium - ANSWER Where supply equals demand in a market or economy.
Exchange rate - ANSWER The price of one currency expressed in terms of
another.
