ECO-2025X09 – Key Microeconomic and
Macroeconomic Concepts, Policies, and Market
Structures
Advalorem tax - Tax levied as a percentage of the price of a good.
Aggregate demand - Total demand in the economy including consumption, investment,
government expenditure and exports minus imports.
Anti-competitive practices or restrictive trade practices - An attempt by firms to prevent or
restrict competition.
Assisted areas - Areas designated as having problems by the UK or EU and are eligible for
support.
Average costs - The cost per unit of output; it is equal to total cost divided by
output.
Backward vertical integration - Merging with a firm that operates in the previous stage of
production.
Balance of payments - A record of all transactions relating to international trade.
Balance of trade or visible balance - The difference between visible exports and visible
imports.
Barriers to entry - Obstacles that might discourage a firm from entering a market.
, Base rate - The rate of interest set by the MPC which influences all other rates in the
economy.
Basic economic problem - Allocation of a nation's scarce resources between competing uses
that represent infinite wants.
Boom - The peak of the economic cycle where GDP is growing at its fastest.
Budget - The government's spending and revenue plans for the next year.
Budget deficit - The amount by which government spending exceeds government
revenue.
Budget surplus - The amount by which government revenue exceeds government
spending.
Capital intensive - Where production relies more heavily on machinery relative to
labour.
Cartel - Where a group of firms or countries join together and to agree on pricing or output
levels in the market.
Choice - Deciding between alternative uses of scare resources.
Collusion - Agreements between firms to restrict competition.
Competition - The rivalry that exists between firms when trying to sell goods to the same
group of customers.
Competition Commission - A government body that carries out investigations into mergers
and markets where there may be some consumer exploitation.
Macroeconomic Concepts, Policies, and Market
Structures
Advalorem tax - Tax levied as a percentage of the price of a good.
Aggregate demand - Total demand in the economy including consumption, investment,
government expenditure and exports minus imports.
Anti-competitive practices or restrictive trade practices - An attempt by firms to prevent or
restrict competition.
Assisted areas - Areas designated as having problems by the UK or EU and are eligible for
support.
Average costs - The cost per unit of output; it is equal to total cost divided by
output.
Backward vertical integration - Merging with a firm that operates in the previous stage of
production.
Balance of payments - A record of all transactions relating to international trade.
Balance of trade or visible balance - The difference between visible exports and visible
imports.
Barriers to entry - Obstacles that might discourage a firm from entering a market.
, Base rate - The rate of interest set by the MPC which influences all other rates in the
economy.
Basic economic problem - Allocation of a nation's scarce resources between competing uses
that represent infinite wants.
Boom - The peak of the economic cycle where GDP is growing at its fastest.
Budget - The government's spending and revenue plans for the next year.
Budget deficit - The amount by which government spending exceeds government
revenue.
Budget surplus - The amount by which government revenue exceeds government
spending.
Capital intensive - Where production relies more heavily on machinery relative to
labour.
Cartel - Where a group of firms or countries join together and to agree on pricing or output
levels in the market.
Choice - Deciding between alternative uses of scare resources.
Collusion - Agreements between firms to restrict competition.
Competition - The rivalry that exists between firms when trying to sell goods to the same
group of customers.
Competition Commission - A government body that carries out investigations into mergers
and markets where there may be some consumer exploitation.
