|
Hint
|
Answer
|
|
The rate of interest market investors demand when purchasing government bonds.
|
Bond Yield
|
|
The loss in producer and consumer surplus due to an inefficient level of production.
|
Deadweight Loss
|
A system similar to the CPI but includes mortgage repayments and some taxes, and excludes the top 4 per cent of earners. |
RPI
|
|
The cost to the parties directly involved in an economic transaction.
|
Private Cost
|
|
Subjective statements, containing a value judgement which cannot be tested.
|
Normative Statements
|
|
Goods for which demand increases more than what is proportional as income rises.
|
Luxury Goods
|
|
A tax on imported products which may be ad valorem or a specific tax.
|
Tariff
|
|
The reserves of gold or foreign currencies typically held by central banks on behalf of their national government
|
Foreign Exchange Reserves
|
|
A measure of money's value in terms of what it can buy.
|
Purchasing Power
|
|
The consumption of a good by one person does not reduce the amount available for others.
|
Non-Rivalrous
|
Measures the relationship between a change in quantity demanded and a change in real income. |
Income Elasticity Of Demand
|
|
The consumption of these goods may lead negative externalities which causes a fall in social welfare.
|
De-Merit Goods
|
Jobs for all that want them but not zero unemployment because some people are always between jobs. |
Full Employment
|
|
Spending on capital goods including plant & machinery and infrastructure.
|
Investment
|
|
A monopoly limited to a specific geographical area.
|
Local Monopoly
|
The exchange rate that equates the price of a basket of identical traded goods and services in two countries. |
Purchasing Power Parity
|
|
Occurs when production and/or consumption impose external costs on third parties outside of the market for which no appropriate compensation is paid.
|
Negative Externality
|
|
Where a firm or economy can produce more with existing resources.
|
Spare Capacity
|
|
Period of time in which all inputs may be varied but the basic technology of production is unchanged.
|
Long Run
|
|
The cost of production or consumption of a product for society as a whole.
|
Social Cost
|
|
When income increases, quantity demanded increases.
|
Normal Goods
|
|
A legally-imposed price in a market that suppliers cannot exceed.
|
Maximum Price
|
|
Goods that are both non-rival and non-excludable.
|
Public Goods
|
The ever increasing integration of the world’s local, regional and national economies into a single market. |
Globalisation
|
|
The breaking down of a production process in smaller, specific tasks, intended to increase productivity.
|
Division Of Labour
|
|
Investment from overseas businesses into a specific country.
|
FDI
|
Used to describe a severe recession which may become a prolonged downturn in the economy and where GDP falls by at least 10%. |
Depression
|
|
The value of the next best alternative foregone.
|
Opportunity Cost
|
|
A market dominated by a few large suppliers.
|
Oligopoly
|
Unemployment which is known to exist but is not included in the official government figures, also known as under-employment. |
Hidden Unemployment
|
|
The barriers preventing people from moving from one area to another to find work.
|
Geographical Immobility
|
|
The responsiveness of demand for a product following a change in its own price.
|
Price Elasticity Of Demand
|
|
Goods in competitive demand and act as replacements for another product.
|
Substitute Goods
|
|
When the value of exports exceeds the value of imports in a given time period.
|
Trade Surplus
|
Similar to GDP except that it adds what a country earns from overseas investments and subtracts what foreigners earn in a country and send back home. |
GNI
|
|
Automatic fiscal changes that occur as the economy moves through stages of the business cycle.
|
Automatic Stabilisers
|
|
The difference between potential and actual real national income in an economy.
|
Output Gap
|
|
When a business reaches the lowest point of its average cost curve.
|
Productive Efficiency
|
The difference between what producers are willing and able to supply a good for and the price they actually receive. |
Producer Surplus
|
|
The extent to which a household's financial resources falls below an average income threshold for the economy. Exact definition varies by country
|
Relative Poverty
|
The reduction of risk achieved by replacing a single risk with a larger number of smaller unrelated risks. |
Diversification
|
|
This is the monetary value of all goods and services expressed at current prices.
|
Nominal GDP
|
|
The increase in revenue resulting from an additional unit of output.
|
Marginal Revenue
|
The use of tariff and non-tariff restrictions on imports to protect domestic producers from foreign competition. |
Protectionism
|
|
When a country imports a greater value of goods and services than it exports.
|
Trade Deficit
|
|
Variations in the annual rate of growth of an economy over time.
|
Economic Cycle
|
|
When the value of an asset or exchange rate increases in value relative to another.
|
Appreciation
|
|
A limit on the quantity of a product can be supplied to a market.
|
Quota
|
|
A tax where low income earners pay a higher proportion of their income in tax than high income earners.
|
Regressive Tax
|
|
The number of people able, available and willing to work at prevailing wage rates.
|
Labour Supply
|
|
The responsiveness of supply of a product following a change in its price.
|
Price Elasticity Of Supply
|
|
A legally imposed price below which the normal market price cannot fall.
|
Minimum Price
|
|
This measures the extent to which the distribution of income among individuals or households within an economy deviates from a perfectly equal distribution.
|
Gini Coefficient
|
|
Quantity of a good or service that a producer is willing and able to provide to the market at a given price in a given time period.
|
Supply
|
|
People of low incomes are disincentivised to look for work or work longer hours because of the effects of the tax and benefits system.
|
Poverty Trap
|
|
Income after taxes and benefits, adjusted for the effects of inflation.
|
Real Disposable Income
|
|
The change in total costs resulting from increasing output by one unit.
|
Marginal Cost
|
|
Any explicit or implicit agreement between suppliers in a market to avoid competition.
|
Collusion
|
|
A measure of efficiency = output per unit of input or output per person employed.
|
Productivity
|
|
Total cost divided by the number of units produced.
|
Average Cost
|
