Edexcel A-Level Economics A: Definitions || with A+ Guaranteed Solutions.

Absolute advantage correct answers When a country's output of a product per unit of input is greater than that of any other country. Absolute poverty correct answers When a person does not have the income or wealth to fulfil their basic needs. Aggregate Demand (AD) correct answers 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) correct answers 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 correct answers The transfer of resources from one country to another. Allocative efficiency correct answers 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 correct answers Where buyers have more information than sellers in a market, or vice versa. Automatic stabilisers correct answers Parts of fiscal policy that automatically react to changes in the economic cycle. Average Cost (AC) correct answers The cost of production per unit of output. Average Revenue (AR) correct answers The revenue per unit sold. Backward vertical integration correct answers Where a firm merges with or takes over a firm further back in the production process. Balance of payments correct answers A record of the international transactions of an economy. Bank rate correct answers 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 correct answers Potential difficulties that make it hard for firms to enter a market. Barriers to exit correct answers Potential difficulties that make it hard for firms to leave a market.