Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions
(Latest 2025)
When a country's output of a product per unit of input is
greater than that of any other country. - Correct Answers
✅Absolute advantage
When a person does not have the income or wealth to fulfil
their basic needs. - Correct Answers ✅Absolute poverty
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.
- Correct Answers ✅Aggregate Demand (AD)
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. - Correct Answers ✅Aggregate Supply (AS)
The transfer of resources from one country to another. -
Correct Answers ✅Aid
Where the price of a good is equal to the price consumers are
willing to pay. This occurs when all resources are allocated
efficiently. - Correct Answers ✅Allocative efficiency
,Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions
(Latest 2025)
Where buyers have more information than sellers in a
market, or vice versa. - Correct Answers ✅Asymmetric
information
Parts of fiscal policy that automatically react to changes in
the economic cycle. - Correct Answers ✅Automatic
stabilisers
The cost of production per unit of output. - Correct Answers
✅Average Cost (AC)
The revenue per unit sold. - Correct Answers ✅Average
Revenue (AR)
Where a firm merges with or takes over a firm further back in
the production process. - Correct Answers ✅Backward
vertical integration
A record of the international transactions of an economy. -
Correct Answers ✅Balance of payments
The official rate of interest set by the central bank (e.g. by
the Monetary Policy Committee of the Bank of England) -
Correct Answers ✅Bank rate
, Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions
(Latest 2025)
Potential difficulties that make it hard for firms to enter a
market. - Correct Answers ✅Barriers to entry
Potential difficulties that make it hard for firms to leave a
market. - Correct Answers ✅Barriers to exit
Economic activity that occurs without taxation and
government intervention. - Correct Answers ✅Black
market
When government spending exceeds tax revenues. - Correct
Answers ✅Budget deficit
When tax revenues exceed government spending. - Correct
Answers ✅Budget surplus
A part of the balance of payments that shows transfers of
non-monetary and fixed assets into and out of the economy. -
Correct Answers ✅Capital account of the balance of
payments
A group of products who collude to limit output in order to
keep prices high. - Correct Answers ✅Cartel
Questions with Complete Solutions
(Latest 2025)
When a country's output of a product per unit of input is
greater than that of any other country. - Correct Answers
✅Absolute advantage
When a person does not have the income or wealth to fulfil
their basic needs. - Correct Answers ✅Absolute poverty
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.
- Correct Answers ✅Aggregate Demand (AD)
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. - Correct Answers ✅Aggregate Supply (AS)
The transfer of resources from one country to another. -
Correct Answers ✅Aid
Where the price of a good is equal to the price consumers are
willing to pay. This occurs when all resources are allocated
efficiently. - Correct Answers ✅Allocative efficiency
,Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions
(Latest 2025)
Where buyers have more information than sellers in a
market, or vice versa. - Correct Answers ✅Asymmetric
information
Parts of fiscal policy that automatically react to changes in
the economic cycle. - Correct Answers ✅Automatic
stabilisers
The cost of production per unit of output. - Correct Answers
✅Average Cost (AC)
The revenue per unit sold. - Correct Answers ✅Average
Revenue (AR)
Where a firm merges with or takes over a firm further back in
the production process. - Correct Answers ✅Backward
vertical integration
A record of the international transactions of an economy. -
Correct Answers ✅Balance of payments
The official rate of interest set by the central bank (e.g. by
the Monetary Policy Committee of the Bank of England) -
Correct Answers ✅Bank rate
, Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions
(Latest 2025)
Potential difficulties that make it hard for firms to enter a
market. - Correct Answers ✅Barriers to entry
Potential difficulties that make it hard for firms to leave a
market. - Correct Answers ✅Barriers to exit
Economic activity that occurs without taxation and
government intervention. - Correct Answers ✅Black
market
When government spending exceeds tax revenues. - Correct
Answers ✅Budget deficit
When tax revenues exceed government spending. - Correct
Answers ✅Budget surplus
A part of the balance of payments that shows transfers of
non-monetary and fixed assets into and out of the economy. -
Correct Answers ✅Capital account of the balance of
payments
A group of products who collude to limit output in order to
keep prices high. - Correct Answers ✅Cartel
