Edexcel A-Level Economics A: Definitions Exam Guide |Graded A+| 100% Correct Answers

Edexcel A-Level Economics A: Definitions Exam Guide |Graded A+| 100% Correct Answers Absolute advantage *Ans* When a country's output of a product per unit of input is greater than that of any other country. Absolute poverty *Ans* When a person does not have the income or wealth to fulfil their basic needs. Aggregate Demand (AD) *Ans* The 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) *Ans* The 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 *Ans* The transfer of resources from one country to another. Allocative efficiency *Ans* Where 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 *Ans* Where buyers have more information than sellers in a market, or vice versa. Automatic stabilisers *Ans* Parts of fiscal policy that automatically react to changes in the economic cycle. Average Cost (AC) *Ans* The cost of production per unit of output. Average Revenue (AR) *Ans* The revenue per unit sold. Backward vertical integration *Ans* Where a firm merges with or takes over a firm further back in the production process. Balance of payments *Ans* A record of the international transactions of an economy. Bank rate *Ans* The official rate of interest set by the central bank (e.g. by the Monetary Policy Committee of the Bank of England) Barriers to entry *Ans* Potential difficulties that make it hard for firms to enter a market. Barriers to exit *Ans* Potential difficulties that make it hard for firms to leave a market.