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Edexcel A-Level Economics A Definitions With Complete Solutions Latest Update
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Edexcel A-Level Economics A Definitions WithComplete Solutions Latest Update
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.
, Black market - correct answers Economic activity that occurs without taxation and
government intervention.
Budget deficit - correct answers When government spending exceeds tax
revenues.
Budget surplus - correct answers When tax revenues exceed government
spending.
Capital account of the balance of payments - correct answers A part of the balance
of payments that shows transfers of non-monetary and fixed assets into and out of
the economy.
Cartel - correct answers A group of products who collude to limit output in order
to keep prices high.
Central bank - correct answers The institution responsible for issuing banknotes in
an economy, acting as a lender of last resort, and implementing monetary policy.
Ceteris paribus - correct answers All other things remaining equal
Circular flow of income - correct answers The flow of national output, income and
expenditure between firms and households.
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