A level economics edexcel

Globalisation: The process by which the world is becoming a single economy Sustainable Development: Development that meets the needs of current generations without compromising the needs of future generations Transfer Pricing: An account technique used by TNC's for reducing taxes on profits. By buying internally to ensure losses in high tax countries and profits declared in low tax regions. Capital Markets: Financial Markets which provide long-term borrowing and lending...

Globalisation Refers to the increasing integration and interdependence of the World's national economies into a single international market. It involves the free trade of goods and services, the free movement of capital and labour and the free interchange of technology and intellectual capital Developed economy An economy that that is economically developed and its population has a high GDP per capita e.g USA, Australia Developing economy An economy that that is less economical...

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 inflation, it measures the actual purchasing power of consumers in an economy GDP per capita Is the level of GDP divided by population The volume of goods and services Is the quant...

Economic Growth This is an increase in real or potential GDP. This will lead to higher living standards and high levels of employment. GDP Gross Domestic Product Gross Domestic Product This is the value of all the goods and services produced in an economy in a year. Real Gross Domestic Product This is measured at constant prices adjusted for inflation. Nominal Gross Domestic Product This is measures at current prices including inflation. Total Gross Domest...

Gross Domestic Product (GDP) [alternative definition] The total value of all finished goods and services produced within an economy's borders in a given period of time Standards of Living (SoL) The quality of life enjoyed by people. This comprises material aspects (i.e. how much people are getting of the things they want and need), and non-material aspects (i.e. how healthy, educated, and happy they are) Short-run economic growth The change in the actual value of GDP measured i...

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 at any given possible overall price level Automatic stabilisers Effects by which government expenditure adjusts to offset the effects of recession and boom without the need for active inter...

Balance of Payments (BoP) A record of all of the transactions between one economy (country) and all other economies (countries) over a given period of time. It is an account of all of the money flows into and out of an economy . The two halves of Balance of Payments 'Current Account' and 'Capital and Financial Accounts' Current account The part of the BoP where payments relating to 1) Trade in Goods 2) Trade in Services 3) Net Income, and... 4) Current Transfers are reco...

Price Level The average of the prices of all goods and services within the economy. Other names for Price Level 'General Price Level' and 'Average Price Level' Inflation A sustained INCREASE in the price level. This means that prices for a range of goods and services are RISING, which means that the VALUE OF MONEY is FALLING in relation to the goods and services it is used to buy. Deflation A sustained DECREASE in the price level. This means that prices for a range o...

What are the four assumptions of micro economics? Rational Consumers, perfectly competitive market, average consumer, ceteris paribus What is a positive statement? a statement that can be tested and validated What is a normative statement? an opinion, a value judgement What is the economic problem? Resources are scarce, however wants are unlimited. There are finite resources so goods/services need to be allocated efficiently. What is opportunity cost? Cost of the next be...

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 economy at a given time at given price level. What is GDP? Gross Domestic Product = the total value of all goods and services produced in an economy in a given time period. What does % ...