10/23/25, 6:15 AM Edexcel A-Level Economics EXAM (updated 2025) Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026 Edexcel…
Edexcel A-Level Economics EXAM (updated 2025)
Questions & Answers | Latest Already Graded A+
UPDATE 2025|2026 Edexcel A-Level Economics
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Terms in this set (1993)
When a country's output of a product per unit of input
Absolute advantage
is greater than that of any other country.
When a person does not have the income or wealth
Absolute poverty
to fulfil their basic needs.
The total demand/spending in an economy at a given
price level over a given period of time. Made up of
Aggregate Demand (AD)
consumption, investment, government spending and
net external demand.
The total amount of goods and services that can be
Aggregate Supply (AS) supplied in an economy at a given price level over a
given period of time.
Aid The transfer of resources from one country to another.
Where the price of a good is equal to the price
Allocative efficiency consumers are willing to pay. This occurs when all
resources are allocated efficiently.
Where buyers have more information than sellers in a
Asymmetric information
market, or vice versa.
Parts of fiscal policy that automatically react to
Automatic stabilisers
changes in the economic cycle.
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Average Cost (AC) The cost of production per unit of output.
Average Revenue (AR) The revenue per unit sold.
Backward vertical Where a firm merges with or takes over a firm further
integration back in the production process.
A record of the international transactions of an
Balance of payments
economy.
The official rate of interest set by the central bank (e.g.
Bank rate by the Monetary Policy Committee of the Bank of
England)
Potential difficulties that make it hard for firms to enter
Barriers to entry
a market.
Potential difficulties that make it hard for firms to leave
Barriers to exit
a market.
Economic activity that occurs without taxation and
Black market
government intervention.
Budget deficit When government spending exceeds tax revenues.
Budget surplus When tax revenues exceed government spending.
A part of the balance of payments that shows
Capital account of the
transfers of non-monetary and fixed assets into and
balance of payments
out of the economy.
A group of products who collude to limit output in
Cartel
order to keep prices high.
The institution responsible for issuing banknotes in an
Central bank economy, acting as a lender of last resort, and
implementing monetary policy.
Ceteris paribus All other things remaining equal
The flow of national output, income and expenditure
Circular flow of income
between firms and households.
An economy where only the government determines
Command economy
the allocation of resources.
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When the opportunity cost of producing a good or
Comparative advantage
service is lower than that of any other country.
Government policy aimed at reducing monopoly
Competition policy power in order to increase efficiency and to ensure
fairness for consumers.
Concentration ratio A measure of the dominance of firms in a market.
Where a firm merges with or takes over a firm in a
Conglomerate integration
completely different market.
The difference between the price a consumer pays
Consumer surplus
and the price they were willing to pay.
Consumption The purchase of goods and services.
The degree to which new entrants find it easy to enter
Contestability
the market.
Cost-push inflation Inflation caused by rising costs of production.
A measure of the responsiveness of demand of one
Cross elasticity of demand
good/service to a change in price of another
(XED)
good/service.
A part of the balance of payments that consists of:
Current account of the
trade in goods, trade in services, primary income and
balance of payments
secondary income.
Unemployment caused by a lack of demand in the
Cyclical unemployment
economy.
The sustained fall in the average price of goods and
Deflation
services in an economy over a period of time.
Inflation caused by increased demand in the
Demand-pull inflation
economy.
Government policy that aims to alter aggregate
Demand-side policy
demand in the economy.
Where a firm sells of a part/parts of its business to
Demerger
create separate firms.
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Removing government legislation that could restrict
Deregulation
competition.
The demand for a good or service due to its use in
Derived demand
making another good or service.
Relatively rich, industrialised countries with a high
Developed countries
GDP per capita.
Relatively poor countries that tend to rely on labour-
Developing countries
intensive industries, with a low GDP per capita.
Diseconomies of scale Where average cost rises as output rises.
Disinflation A fall in the rate of inflation.
Income available for households to spend after their
Disposable income
tax obligations are fulfilled.
Dividend A share in a firm's profits paid to shareholders.
When the owner of a firm ceases to control its day-to-
Divorce of ownership from
day operations, which can lead to the principal-agent
control
problem.
Where firms improve efficiency in the long run by
Dynamic efficiency investing in R&D of products, or investing in the
production process.
The fluctuation in actual growth rates over a period of
Economic cycle
time.
An assessment of the standards of living and overall
Economic development
welfare of a country's population.
Economic growth An increase in an economy's productive potential.
The process by which the economies of different
Economic integration
countries become more closely linked.
Economically active The people in an economy who are old enough to
population and capable of working.
Economies of scale Where average cost falls as output rises.
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Edexcel A-Level Economics EXAM (updated 2025)
Questions & Answers | Latest Already Graded A+
UPDATE 2025|2026 Edexcel A-Level Economics
Save
Terms in this set (1993)
When a country's output of a product per unit of input
Absolute advantage
is greater than that of any other country.
When a person does not have the income or wealth
Absolute poverty
to fulfil their basic needs.
The total demand/spending in an economy at a given
price level over a given period of time. Made up of
Aggregate Demand (AD)
consumption, investment, government spending and
net external demand.
The total amount of goods and services that can be
Aggregate Supply (AS) supplied in an economy at a given price level over a
given period of time.
Aid The transfer of resources from one country to another.
Where the price of a good is equal to the price
Allocative efficiency consumers are willing to pay. This occurs when all
resources are allocated efficiently.
Where buyers have more information than sellers in a
Asymmetric information
market, or vice versa.
Parts of fiscal policy that automatically react to
Automatic stabilisers
changes in the economic cycle.
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Average Cost (AC) The cost of production per unit of output.
Average Revenue (AR) The revenue per unit sold.
Backward vertical Where a firm merges with or takes over a firm further
integration back in the production process.
A record of the international transactions of an
Balance of payments
economy.
The official rate of interest set by the central bank (e.g.
Bank rate by the Monetary Policy Committee of the Bank of
England)
Potential difficulties that make it hard for firms to enter
Barriers to entry
a market.
Potential difficulties that make it hard for firms to leave
Barriers to exit
a market.
Economic activity that occurs without taxation and
Black market
government intervention.
Budget deficit When government spending exceeds tax revenues.
Budget surplus When tax revenues exceed government spending.
A part of the balance of payments that shows
Capital account of the
transfers of non-monetary and fixed assets into and
balance of payments
out of the economy.
A group of products who collude to limit output in
Cartel
order to keep prices high.
The institution responsible for issuing banknotes in an
Central bank economy, acting as a lender of last resort, and
implementing monetary policy.
Ceteris paribus All other things remaining equal
The flow of national output, income and expenditure
Circular flow of income
between firms and households.
An economy where only the government determines
Command economy
the allocation of resources.
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When the opportunity cost of producing a good or
Comparative advantage
service is lower than that of any other country.
Government policy aimed at reducing monopoly
Competition policy power in order to increase efficiency and to ensure
fairness for consumers.
Concentration ratio A measure of the dominance of firms in a market.
Where a firm merges with or takes over a firm in a
Conglomerate integration
completely different market.
The difference between the price a consumer pays
Consumer surplus
and the price they were willing to pay.
Consumption The purchase of goods and services.
The degree to which new entrants find it easy to enter
Contestability
the market.
Cost-push inflation Inflation caused by rising costs of production.
A measure of the responsiveness of demand of one
Cross elasticity of demand
good/service to a change in price of another
(XED)
good/service.
A part of the balance of payments that consists of:
Current account of the
trade in goods, trade in services, primary income and
balance of payments
secondary income.
Unemployment caused by a lack of demand in the
Cyclical unemployment
economy.
The sustained fall in the average price of goods and
Deflation
services in an economy over a period of time.
Inflation caused by increased demand in the
Demand-pull inflation
economy.
Government policy that aims to alter aggregate
Demand-side policy
demand in the economy.
Where a firm sells of a part/parts of its business to
Demerger
create separate firms.
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Removing government legislation that could restrict
Deregulation
competition.
The demand for a good or service due to its use in
Derived demand
making another good or service.
Relatively rich, industrialised countries with a high
Developed countries
GDP per capita.
Relatively poor countries that tend to rely on labour-
Developing countries
intensive industries, with a low GDP per capita.
Diseconomies of scale Where average cost rises as output rises.
Disinflation A fall in the rate of inflation.
Income available for households to spend after their
Disposable income
tax obligations are fulfilled.
Dividend A share in a firm's profits paid to shareholders.
When the owner of a firm ceases to control its day-to-
Divorce of ownership from
day operations, which can lead to the principal-agent
control
problem.
Where firms improve efficiency in the long run by
Dynamic efficiency investing in R&D of products, or investing in the
production process.
The fluctuation in actual growth rates over a period of
Economic cycle
time.
An assessment of the standards of living and overall
Economic development
welfare of a country's population.
Economic growth An increase in an economy's productive potential.
The process by which the economies of different
Economic integration
countries become more closely linked.
Economically active The people in an economy who are old enough to
population and capable of working.
Economies of scale Where average cost falls as output rises.
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