Edexcel A-Level Economics A: Definitions Exam 2024 Questions & Answers(graded A)

Edexcel A-Level Economics A: Definitions Exam 2024 Questions & Answers(graded A) Absolute advantage - ANSWERSWhen a country's output of a product per unit of input is greater than that of any other country. Absolute poverty - ANSWERSWhen a person does not have the income or wealth to fulfil their basic needs. Aggregate Demand (AD) - ANSWERSThe 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) - ANSWERSThe total amount of goods and services that can be supplied in an economy at a given price level over a given period of time. Aid - ANSWERSThe transfer of resources from one country to another. Allocative efficiency - ANSWERSWhere the price of a good is equal to the price consumers are willing to pay. This occurs when all resources are allocated efficiently. Asymmetric information - ANSWERSWhere buyers have more information than sellers in a market, or vice versa. Automatic stabilisers - ANSWERSParts of fiscal policy that automatically react to changes in the economic cycle. Average Cost (AC) - ANSWERSThe cost of production per unit of output. Average Revenue (AR) - ANSWERSThe revenue per unit sold. Backward vertical integration - ANSWERSWhere a firm merges with or takes over a firm further back in the production process. Balance of payments - ANSWERSA record of the international transactions of an economy. Bank rate - ANSWERSThe official rate of interest set by the central bank (e.g. by the Monetary Policy Committee of the Bank of England) Barriers to entry - ANSWERSPotential difficulties that make it hard for firms to enter a market. Barriers to exit - ANSWERSPotential difficulties that make it hard for firms to leave a market. Black market - ANSWERSEconomic activity that occurs without taxation and government intervention. Budget deficit - ANSWERSWhen government spending exceeds tax revenues. Budget surplus - ANSWERSWhen tax revenues exceed government spending.