Economics IGCSE
EDEXCEL with correct
answers 2025/2026
Advalorem tax - correct answersTax levied as a percentage of the price of a good.
Aggregate demand - correct answersTotal demand in the economy including consumption,
investment, government expenditure and exports minus imports.
Anti-competitive practices or restrictive trade practices - correct answersAn attempt by firms to
prevent or restrict competition.
Assisted areas - correct answersAreas designated as having problems by the UK or EU and are
eligible for support.
Average costs - correct answersThe cost per unit of output; it is equal to total cost divided by
output.
,Backward vertical integration - correct answersMerging with a firm that operates in the previous
stage of production.
Balance of payments - correct answersA record of all transactions relating to international trade.
Balance of trade or visible balance - correct answersThe difference between visible exports and
visible imports.
Barriers to entry - correct answersObstacles that might discourage a firm from entering a
market.
Base rate - correct answersThe rate of interest set by the MPC which influences all other rates in
the economy.
Basic economic problem - correct answersAllocation of a nation's scarce resources between
competing uses that represent infinite wants.
Boom - correct answersThe peak of the economic cycle where GDP is growing at its fastest.
Budget - correct answersThe government's spending and revenue plans for the next year.
Budget deficit - correct answersThe amount by which government spending exceeds
government revenue.
Budget surplus - correct answersThe amount by which government revenue exceeds
government spending.
Capital intensive - correct answersWhere production relies more heavily on machinery relative
to labour.
, Cartel - correct answersWhere a group of firms or countries join together and to agree on
pricing or output levels in the market.
Choice - correct answersDeciding between alternative uses of scare resources.
Collusion - correct answersAgreements between firms to restrict competition.
Competition - correct answersThe rivalry that exists between firms when trying to sell goods to
the same group of customers.
Competition Commission - correct answersA government body that carries out investigations
into mergers and markets where there may be some consumer exploitation.
Complementary goods - correct answersGoods purchased together because they are consumed
together.
Conglomerate or diversifying merger - correct answersThe merging of firms involved in
completely different business activities.
Consumer price index (CPI) - correct answersA measure of the general price level; used in the
UK and across the Eurozone.
Contractionary fiscal policy - correct answersFiscal measures designed to dampen demand in
the economy.
Cost-push inflation - correct answersInflation caused by rising business costs.
Costs - correct answersThe expenses incurred when producing goods and services.
EDEXCEL with correct
answers 2025/2026
Advalorem tax - correct answersTax levied as a percentage of the price of a good.
Aggregate demand - correct answersTotal demand in the economy including consumption,
investment, government expenditure and exports minus imports.
Anti-competitive practices or restrictive trade practices - correct answersAn attempt by firms to
prevent or restrict competition.
Assisted areas - correct answersAreas designated as having problems by the UK or EU and are
eligible for support.
Average costs - correct answersThe cost per unit of output; it is equal to total cost divided by
output.
,Backward vertical integration - correct answersMerging with a firm that operates in the previous
stage of production.
Balance of payments - correct answersA record of all transactions relating to international trade.
Balance of trade or visible balance - correct answersThe difference between visible exports and
visible imports.
Barriers to entry - correct answersObstacles that might discourage a firm from entering a
market.
Base rate - correct answersThe rate of interest set by the MPC which influences all other rates in
the economy.
Basic economic problem - correct answersAllocation of a nation's scarce resources between
competing uses that represent infinite wants.
Boom - correct answersThe peak of the economic cycle where GDP is growing at its fastest.
Budget - correct answersThe government's spending and revenue plans for the next year.
Budget deficit - correct answersThe amount by which government spending exceeds
government revenue.
Budget surplus - correct answersThe amount by which government revenue exceeds
government spending.
Capital intensive - correct answersWhere production relies more heavily on machinery relative
to labour.
, Cartel - correct answersWhere a group of firms or countries join together and to agree on
pricing or output levels in the market.
Choice - correct answersDeciding between alternative uses of scare resources.
Collusion - correct answersAgreements between firms to restrict competition.
Competition - correct answersThe rivalry that exists between firms when trying to sell goods to
the same group of customers.
Competition Commission - correct answersA government body that carries out investigations
into mergers and markets where there may be some consumer exploitation.
Complementary goods - correct answersGoods purchased together because they are consumed
together.
Conglomerate or diversifying merger - correct answersThe merging of firms involved in
completely different business activities.
Consumer price index (CPI) - correct answersA measure of the general price level; used in the
UK and across the Eurozone.
Contractionary fiscal policy - correct answersFiscal measures designed to dampen demand in
the economy.
Cost-push inflation - correct answersInflation caused by rising business costs.
Costs - correct answersThe expenses incurred when producing goods and services.
