Edexcel Economics Questions & Correct Answers Pack Rated 100%

Actual economic growth : The rate growth of GDP in a period Aggregate demand : The total amount of spending on goods and services produced in an economy during a period of time Aggregate demand curve : The relationship between the AD and the overall price level; it shoes planned expenditure a...

Model : A theoretical concept that looks at how differant variables interact. Ceteris Paribus : All other factors remain the same. Positive Statement : Objective, factually based comments that can be tested. Normative Statement : Subjective, questionable comments based on valued judgements th...

GDP : Gross domestic product measures the value of goods and services produced in an economy, it also measures national income/national expenditure Nominal GDP : Measures the monetary value of GDP (this may include the effects of inflation) Real GDP : Measures GDP adjusted for the effects of ...

Absolute advantage : When a country's output of a product per unit of input is greater than that of any other country. Absolute poverty : When a person does not have the income or wealth to fulfil their basic needs. Aggregate Demand (AD) : The total demand/spending in an economy at a given p...

Macroeconomics : The study of the economy as a whole, including inflation, growth and unemployment. Aggregate demand : The total amount of goods / services demanded in an economy at a given time at a given price level. Aggregate supply : Total amount of goods and services supplied in the econ...

Market : Where consumers and producers come into contact with each other to exchange goods and services Utility : The amount of satisfaction obtained from consuming a good or service Rational decision making : Where consumers allocate their expenditure on goods and services to maximize utilit...

Economics : The study of the allocation of scarce resources. Economic Goods : Resources that are scarce. Productivity : The output per unit of input. The Economic Problem : Resources are scarce but wants are infinite. Scarcity : The world's resources are limited, there are only limited amo...

GDP : Gross domestic product measures the value of goods and services produced in an economy, it also measures national income/national expenditure Nominal GDP : Measures the monetary value of GDP (this may include the effects of inflation) Real GDP : Measures GDP adjusted for the effects of ...

Firm : An organisation that brings together factors of production in order to produce output. Reasons Firms Grow : 1. Increase market share. 2. Increase economies of scale. 3. Gain power. Reasons Firms Remain Small : 1. Legal barriers. 2. Overt barriers 3. High sunk costs. 4. Niche-market ...

Backwards vertical integration : a joining together into one firm of two or more firms where the purchaser merges with/takes over one or more of its suppliers Conglomerate integration : a joining together into one firm of two or more firms producing unrelated products Demerger : when a firm s...

Economics : The study of the allocation of scarce resources. Economic Goods : Resources that are scarce. Short Run : A time period where at least one factor of production is fixed. Long Run : A time period where all factors of production are variable. Productivity : The output per unit of i...

1.1.1 - The Economic Problem : The basic economic problem : Scarcity - unlimited wants and finite resources, so choices have to be made. Resources have to be used and distributed optimally. Scarcity refers to the shortage of resources in relation to the quantity of human wants. Scarcity Exa...

scarce resources : resources that are limited or finite opportunity cost : the value of the next best alternative forgone economic problem : resources are scarce but wants are unlimited production possibility frontier : a diagram that shows all the combinations of two goods that can be produc...

Aggregate demand : The total of all demands or expenditures in the economy at any given price. Aggregate demand curve : Shows the relationship between the price level and equilibrium national income. As the price level rises the equilibrium level of national income falls. Animal spirits : Bus...