Term
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Definition
| Average income from the sales of each individual good (total revenue/quantity). |
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Term
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Definition
| When the value of one currency rises in value to another. |
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Term
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Definition
| A record of all financial transactions between the UK and the rest of the world. |
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Term
| Balance of payments (current account) deficit |
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Definition
| When the value of the UK’s exports of goods and services are less than the value of imported goods and services. X > M. |
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Term
| Balance of payments (current account) surplus |
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Definition
| When the UK’s exports of goods and services are greater than the values of imported goods and services. X > M. |
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Term
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Definition
| The part of the current account that records the sales and purchase of physical items between the UK and the rest of the world. |
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Term
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Definition
| Circumstances that could prevent a firm from successfully joining a market (selling a particular good or service). |
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Term
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Definition
| The interest rate set by the bank of England that influences market interest rates. |
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Term
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Definition
| When government spending is greater than tax revenue (spending > tax). |
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Term
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Definition
| When government tax revenue exceeds expenditure (tax > spending). |
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Term
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Definition
| A financial institution which is entirely owned by its members. It offers banking and other financial services to these members. |
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Term
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Definition
| The machinery and tools used in the creation of goods and services. This could include a factory or a coffee machine. The payment for capital is interest. (This is usually because it is purchased using borrowed money.) |
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Term
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Definition
| Measures unemployment by the number of individuals claiming unemployment benefit that week. |
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Term
| Commercial banks (also known as high street or retail banks) |
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Definition
| These look to make profits by selling financial services to households and businesses. |
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Term
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Definition
| A market where a wide variety of producers are competing with each other to supply goods and services. |
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Term
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Definition
| Two goods which are often consumed together. Examples could include strawberries and cream or milk and cereal. |
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Term
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Definition
| A person who purchase goods and services for personal use. |
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Term
| Consumer price index (CPI) |
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Definition
| Measuring inflation by taking the average weighted price level of a basket of goods and comparing it between years. |
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Term
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Definition
| When inflation is caused by an increase in the costs of production. For example, an increase in wages or the cost of raw materials. |
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Term
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Definition
| The part of the balance of payments which records the exchange of goods and services between the UK and the rest of the world. |
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Term
| Cyclical unemployment (often called demand deficient unemployment) |
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Definition
| Unemployment caused by a lack of demand for goods and services (the economy is in a recession or slump). |
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Term
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Definition
| Agreement between the lender and borrower allowing the borrower to pay for goods immediately and make payments in the future. |
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Term
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Definition
| The quantity of a good or service that consumers are willing and able to buy at a given price and a given time period. |
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Term
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Definition
| A curve showing the quantity demanded for a good or service at any given price level. |
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Term
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Definition
| When inflation is caused by an increase in demand for goods and services within an economy (this often occurs during a recovery or boom stages of the economic cycle). |
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Term
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Definition
| Goods which are worse for the consumer than they perceive and so are over consumed by the market. An example of this would be consumption of fatty and sugary foods. |
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Term
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Definition
| When the value of one currency falls in value to another. |
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Term
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Definition
| The removal of regulations or restrictions on a particular business or industry. |
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Term
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Definition
| A country with a relatively high level of economic growth and mature institutions and infrastructure. |
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Term
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Definition
| Taxes based on income such as income tax or national insurance contributions. |
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Term
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Definition
| Where an increase in a firm’s output results in an increase in its average costs. |
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Term
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Definition
| When production of a good or service is split into a number of smaller tasks and employees then specialise in completing each of these tasks with the intention of increasing productivity. |
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Term
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Definition
| The making, producing, buying, selling or consuming products or services. |
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Term
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Definition
| Resources which are scarce. Due to them being limited decisions will have to be made about how they are used within an economy. |
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Term
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Definition
| Where an increase in a firm’s output results in a fall in average costs. Note there is not requirement for students to know the relevant diagram for Economies of scale but teachers may choose to use this in order to aid teaching. |
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Term
| Enterprise/entrepreneurship |
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Definition
| Individuals who take the factors of production and convert them into goods and services which can be sold for profit. The payment for enterprise is profit. |
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Term
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Definition
| When demand for a good or service is equal to supply. When a market is in equilibrium then the price is likely to be stable. |
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Term
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Definition
| Refers to the European Union (EU) as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services. |
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Term
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Definition
| Where quantity demanded of a good or service exceeds supply, resulting in shortages and higher prices. |
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