An excellent array of key words (and definitions) that can be used in any piece of work for Edexcel Economics B : Unit 1. Most of the key words can further be used in other unit, but are specific to the topics of Unit 1 (e.g. 'Inflation'). This document can be used for revision, or just as a refere...
SCARCITY Not enough resources to allocate to all people
OPPORTUNITY COST Measures the cost of any choice in terms of the next best alternative
TRADE OFF A situation that includes losing one quality / characteristic in return for gaining
another
TAX CREDITS Discounts of tax (e.g benefits)
MULTIPLIER EFFECT When one person spends money on a business, the business owner gets to
spend on their own business or another
POSITIVE STATEMENTS Proven as either true or false
NORMATIVE STATEMENTS Values judgement and opinion to depend outcome
AUSTERITY Difficult economic conditions created by government measures to reduce
public expenditure
SURPLUS More money coming in than out
DEFICIT More money coming out than going in
STAKEHOLDER A person / group of people affected by the behaviour of a business
ZERO HOUR CONTRACT Employees have no set contract, work only when they are needed
CREATIVE DESTRUCTION The way in which quality-improving innovations lead to economic growth
INNOVATION Involving developing an idea that will generate new and improved products /
production techniques
DISRUPTERS / The businesses that manage to initiate change across the market
FIRST-MOVER ADVANTAGE
ADDING VALUE When factors of production are used to make material inputs more valuable
to potential customers
FACTORS OF PRODUCTION Land, Labour, Capital, Enterprise
SPECIALISATION Businesses concentrating on labour / product expertise in a particular field
DIVISION OF LABOUR Organisation of employees so individuals specialise in a part of the
production process
INFLATION Cost of living - price increase
DEFLATION Cost of living - price decrease
INTEREST RATES Cost of borrowing money
CPI Consumer Price Index
RPI Retail Price Index (includes housing)
INCOME TAX Percentage that employees pay to government (funds public spending)
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