A Level Economics (AQA) Exam Questions and Answers |Complete Solutions Graded A+
|100% Correct
Supply-side fiscal policies policies that involve changes in fiscal policy that are designed to
improve the LRAS of the economy
Supply-side improvements these arise out of general increases in productive capacity
resulting from businesses acting out of their own interest in improving efficiency and the
quantity of their output
Supply-side policies deliberate actions taken by the government designed to increase the
LRAS of the economy (i.e shift the LRAS curve to the right)
Supply-side shocks unexpected and significant changes in the price of factors of production
or the availability of factors of production
Supply The quantity of a good or service that firms plan to sell at given prices in a particular
time period
Sustainable growth economic growth that does not compromise the economy's ability to
grow in the future
Systematic risks risks that could lead to a collapse in the whole or a significant part of the
financial system
Systemic risk a risk that applies to the whole sector (the banking sector is the most common
usage of the term)
Tacit collusion a collusive relationship between firms without any formal agreement having
been made
,Takeover when two or more firms unwillingly join together
Tariff a tax on imported goods and services
Taxation a charge placed by the government on various forms of economic activity Most
taxes are on forms of income and types of spending
The law of diminishing returns when additional units of variable factors of production are
added to a fixed factor, marginal output or product will eventually decrease
Total cost the addition of fixed costs and variable costs at a given level of output
Total revenue the money a firm receives from selling its output, calculated by price x
quantity sold
Trade liberalisation trade without barriers (or with reductions in trade barriers)
Trade union an organisation designed to protect the workforce by pushing for
improvements to pay and conditions. Often a group of workers that bargains collectively with
employers to increase its members' wages
Tragedy of the commons the over-use or exploitation of resources such as the oceans, the
forests or the atmosphere that are not owned by individuals or organisations.
Transmission mechanism: how a change in policy actually works its ways through the economy
to affect macroeconomic indicators
Treasury bill a very short-term form of borrowing by the government, usually repaid within
three months
,Trend growth the rate of growth in LRAS over time, representing the maximum potential
capacity of the UK economy
Trickle-down a free market view that poorer members of society will benefit from high
earners and the relatively wealthy, e.g through job opportunities and helping to fund merit
goods
Unemployment rate the number of unemployed people expressed as a percentage of the
current labour force
Unemployment those of working age who are currently out of work but are actively seeking
work
Unit tax a tax where a fixed amount is placed on the item sold
Utility the amount of satisfaction or benefit that a consumer gains from consuming a good
or service
Variable costs costs of production that vary with the level of output
Velocity of circulation the rate at which money circulates around the economy — i.e how
many times the same banknote is used over a period of time
Vertical equity where the tax paid is based on the ability to pay
Voluntary unemployment where people are unwilling to accept a job at the going wage rate
despite there being jobs available
, Wage differentials differences in wages arising between individuals, occupations, industries
and regions
Wage rigidity the situation where wages are sticky and do not fall in line with falling prices
Want something which people feel improves their standard of living but is not required for
survival
Wealth effect increases in the value of a household's assets cause people to feel wealthier
and encourage them to spend more of their current income (or to borrow more to finance the
increases in spending)
Wealth (finance) a stock of valuable assets such as property or shares
Wealth wealth refers to the value of the assets held by households. Most wealth will be held
in the value of property (or equity) owned by the household
Weighted price index an average level of prices adjusted so that price changes in popular
items affect the price index more than price changes in seldombought items
Withdrawals money taken out of the circular flow of income
X-inefficiency the lack of willingness of firms with monopoly power to control their costs of
production
Allocative efficiency when an economy's factors of production are used to produce the
combination of goods and services that maximises society's welfare
|100% Correct
Supply-side fiscal policies policies that involve changes in fiscal policy that are designed to
improve the LRAS of the economy
Supply-side improvements these arise out of general increases in productive capacity
resulting from businesses acting out of their own interest in improving efficiency and the
quantity of their output
Supply-side policies deliberate actions taken by the government designed to increase the
LRAS of the economy (i.e shift the LRAS curve to the right)
Supply-side shocks unexpected and significant changes in the price of factors of production
or the availability of factors of production
Supply The quantity of a good or service that firms plan to sell at given prices in a particular
time period
Sustainable growth economic growth that does not compromise the economy's ability to
grow in the future
Systematic risks risks that could lead to a collapse in the whole or a significant part of the
financial system
Systemic risk a risk that applies to the whole sector (the banking sector is the most common
usage of the term)
Tacit collusion a collusive relationship between firms without any formal agreement having
been made
,Takeover when two or more firms unwillingly join together
Tariff a tax on imported goods and services
Taxation a charge placed by the government on various forms of economic activity Most
taxes are on forms of income and types of spending
The law of diminishing returns when additional units of variable factors of production are
added to a fixed factor, marginal output or product will eventually decrease
Total cost the addition of fixed costs and variable costs at a given level of output
Total revenue the money a firm receives from selling its output, calculated by price x
quantity sold
Trade liberalisation trade without barriers (or with reductions in trade barriers)
Trade union an organisation designed to protect the workforce by pushing for
improvements to pay and conditions. Often a group of workers that bargains collectively with
employers to increase its members' wages
Tragedy of the commons the over-use or exploitation of resources such as the oceans, the
forests or the atmosphere that are not owned by individuals or organisations.
Transmission mechanism: how a change in policy actually works its ways through the economy
to affect macroeconomic indicators
Treasury bill a very short-term form of borrowing by the government, usually repaid within
three months
,Trend growth the rate of growth in LRAS over time, representing the maximum potential
capacity of the UK economy
Trickle-down a free market view that poorer members of society will benefit from high
earners and the relatively wealthy, e.g through job opportunities and helping to fund merit
goods
Unemployment rate the number of unemployed people expressed as a percentage of the
current labour force
Unemployment those of working age who are currently out of work but are actively seeking
work
Unit tax a tax where a fixed amount is placed on the item sold
Utility the amount of satisfaction or benefit that a consumer gains from consuming a good
or service
Variable costs costs of production that vary with the level of output
Velocity of circulation the rate at which money circulates around the economy — i.e how
many times the same banknote is used over a period of time
Vertical equity where the tax paid is based on the ability to pay
Voluntary unemployment where people are unwilling to accept a job at the going wage rate
despite there being jobs available
, Wage differentials differences in wages arising between individuals, occupations, industries
and regions
Wage rigidity the situation where wages are sticky and do not fall in line with falling prices
Want something which people feel improves their standard of living but is not required for
survival
Wealth effect increases in the value of a household's assets cause people to feel wealthier
and encourage them to spend more of their current income (or to borrow more to finance the
increases in spending)
Wealth (finance) a stock of valuable assets such as property or shares
Wealth wealth refers to the value of the assets held by households. Most wealth will be held
in the value of property (or equity) owned by the household
Weighted price index an average level of prices adjusted so that price changes in popular
items affect the price index more than price changes in seldombought items
Withdrawals money taken out of the circular flow of income
X-inefficiency the lack of willingness of firms with monopoly power to control their costs of
production
Allocative efficiency when an economy's factors of production are used to produce the
combination of goods and services that maximises society's welfare
