Economics IGCSE EDEXCEL
Advalorem tax - ANS Tax levied as a percentage of the price of a good.
Aggregate demand - ANS Total demand in the economy including consumption, investment,
government expenditure and exports minus imports.
Anti-competitive practices or restrictive trade practices - ANS An attempt by firms to prevent or restrict
competition.
Assisted areas - ANS Areas designated as having problems by the UK or EU and are eligible for support.
Average costs - ANS The cost per unit of output; it is equal to total cost divided by output.
Backward vertical integration - ANS Merging with a firm that operates in the previous stage of
production.
Balance of payments - ANS A record of all transactions relating to international trade.
Balance of trade or visible balance - ANS The difference between visible exports and visible imports.
Barriers to entry - ANS Obstacles that might discourage a firm from entering a market.
Base rate - ANS The rate of interest set by the MPC which influences all other rates in the economy.
Basic economic problem - ANS Allocation of a nation's scarce resources between competing uses that
represent infinite wants.
,Boom - ANS The peak of the economic cycle where GDP is growing at its fastest.
Budget - ANS The government's spending and revenue plANS for the next year.
Budget deficit - ANS The amount by which government spending exceeds government revenue.
Budget surplus - ANS The amount by which government revenue exceeds government spending.
Capital intensive - ANS Where production relies more heavily on machinery relative to labour.
Cartel - ANS Where a group of firms or countries join together and to agree on pricing or output levels in
the market.
Choice - ANS Deciding between alternative uses of scare resources.
Collusion - ANS Agreements between firms to restrict competition.
Competition - ANS The rivalry that exists between firms when trying to sell goods to the same group of
customers.
Competition Commission - ANS A government body that carries out investigations into mergers and
markets where there may be some consumer exploitation.
Complementary goods - ANS Goods purchased together because they are consumed together.
, Conglomerate or diversifying merger - ANS The merging of firms involved in completely different
business activities.
Consumer price index (CPI) - ANS A measure of the general price level; used in the UK and across the
Eurozone.
Contractionary fiscal policy - ANS Fiscal measures designed to dampen demand in the economy.
Cost-push inflation - ANS Inflation caused by rising business costs.
Costs - ANS The expenses incurred when producing goods and services.
Current account - ANS Part of the balance of payments where all exports and imports are recorded.
Cyclical or demand deficient unemployment - ANS Unemployment caused by falling demand as result of
a downturn in the economic cycle.
De-industrialisation - ANS The decline in manufacturing.
Deflation - ANS A period where the level of aggregate demand is falling.
Demand - ANS The amount a good will be bought at given prices over a period of time.
Demand curve - ANS Line drawn on a graph which shows how much of a good will be bought at different
prices.
Demand-pull inflation - ANS Inflation caused by too much demand in the economy relative to supply.
Advalorem tax - ANS Tax levied as a percentage of the price of a good.
Aggregate demand - ANS Total demand in the economy including consumption, investment,
government expenditure and exports minus imports.
Anti-competitive practices or restrictive trade practices - ANS An attempt by firms to prevent or restrict
competition.
Assisted areas - ANS Areas designated as having problems by the UK or EU and are eligible for support.
Average costs - ANS The cost per unit of output; it is equal to total cost divided by output.
Backward vertical integration - ANS Merging with a firm that operates in the previous stage of
production.
Balance of payments - ANS A record of all transactions relating to international trade.
Balance of trade or visible balance - ANS The difference between visible exports and visible imports.
Barriers to entry - ANS Obstacles that might discourage a firm from entering a market.
Base rate - ANS The rate of interest set by the MPC which influences all other rates in the economy.
Basic economic problem - ANS Allocation of a nation's scarce resources between competing uses that
represent infinite wants.
,Boom - ANS The peak of the economic cycle where GDP is growing at its fastest.
Budget - ANS The government's spending and revenue plANS for the next year.
Budget deficit - ANS The amount by which government spending exceeds government revenue.
Budget surplus - ANS The amount by which government revenue exceeds government spending.
Capital intensive - ANS Where production relies more heavily on machinery relative to labour.
Cartel - ANS Where a group of firms or countries join together and to agree on pricing or output levels in
the market.
Choice - ANS Deciding between alternative uses of scare resources.
Collusion - ANS Agreements between firms to restrict competition.
Competition - ANS The rivalry that exists between firms when trying to sell goods to the same group of
customers.
Competition Commission - ANS A government body that carries out investigations into mergers and
markets where there may be some consumer exploitation.
Complementary goods - ANS Goods purchased together because they are consumed together.
, Conglomerate or diversifying merger - ANS The merging of firms involved in completely different
business activities.
Consumer price index (CPI) - ANS A measure of the general price level; used in the UK and across the
Eurozone.
Contractionary fiscal policy - ANS Fiscal measures designed to dampen demand in the economy.
Cost-push inflation - ANS Inflation caused by rising business costs.
Costs - ANS The expenses incurred when producing goods and services.
Current account - ANS Part of the balance of payments where all exports and imports are recorded.
Cyclical or demand deficient unemployment - ANS Unemployment caused by falling demand as result of
a downturn in the economic cycle.
De-industrialisation - ANS The decline in manufacturing.
Deflation - ANS A period where the level of aggregate demand is falling.
Demand - ANS The amount a good will be bought at given prices over a period of time.
Demand curve - ANS Line drawn on a graph which shows how much of a good will be bought at different
prices.
Demand-pull inflation - ANS Inflation caused by too much demand in the economy relative to supply.
