Statistics for Edexcel Economics 5. The UK Economy - Income, Growth, Policy

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The average score is 8 of 20

Answer Stats

Description	Term	% Correct
A prolonged slump where real gross domestic product falls by more than 10% from the peak of the trade cycle to the trough	Depression	100%
The practically lowest possibly percentage that the Bank Rate can be and was lowered to during the financial crisis, thus causing the Bank of England to turn to a policy of quantitative easing	0.5%	0%
The British government's inflation target - responsibility of the Bank of England - measured in terms of the consumer price index	2%	0%
That which the Bank of England believes to be the long-run sustainable unemployment rate	5%	0%
An increase in the output of goods and services possibly due to the use of previously unemployed resources or new or improved resources, shown as a movement towards the production possibility frontier	Actual Economic Growth	0%
That an increase in which would cause economic growth by incentivising firms to invest which would have a further multiplier effect, creating more growth	Aggregate Demand	0%
That which would be reduced by a rise in interest rates as spending (investment and consumption) decreases while saving increases	Aggregate Demand	0%
Those two things that must both increase for economic growth to be sustained, in alphabetical order	Aggregate Demand and Aggregate Supply	0%
Where the effects of economic growth are distributed between sectors, regions, consumption and investment, &c. in a balance way	Balanced Growth	0%
The Bank of England's official interest rate, paid to commercial banks and building societies on the reserves with the Bank of England	Bank Rate	0%
Those two things, the cutting of which, can be both a market-based supply-side policy as well as a fiscal policy as it can increase aggregate supply, in alphabetical order	Benefits and Taxes	0%
That period of the trade cycle the aftermath of which can result in a fall in living standards as people were encouraged to consume more, much financed by credit, threatening crippling debt repayments or default once it is over	Boom	0%
The period in which economic growth is above the trend rate, with there being higher inflation and lower unemployment	Boom	0%
The highest point of the trade cycle, where growth and employment are very high and unemployment low, possibly with inflation also being high and increasing	Boom	0%
The four stages of the trade cycle beginning with the highest point	Boom, Downturn, Trough, and Recovery	0%
Where investment rises more so than the labour force, thereby increasing the amount of capital per worker	Capital Deepening	0%
A measure of output per unit of capital	Capital Productivity	0%
Where investment rises in line with the labour force so that the amount of capital per worker remains fixed	Capital Widening	0%
A model of how real goods and services and money flows in the economy	Circular Flow of Income, Expenditure, and Output	0%
That which often arises between and within macroeconomic objectives and macroeconomic policies, thereby requiring trade-offs	Conflict	0%
That type of fiscal policy that will result in a reduction of the inflation rate ceteris paribus	Contractionary	0%
That which economic growth may cause as the increase in consumption increases imports, making less available for export, while the exchange rate may rise making exports more expensive	Current Account Deficit	0%
That which a country might not want due to the international pressure it will bring upon them to reduce it, such was the case leading up to the trade war between the United States of America and People's Republic of China	Current Account Surplus	0%
That which might lead to inflationary pressure as it represents a net outflow of products and a new inflow of money	Current Account Surplus	0%
That which is generally a bad thing as it results in lower consumption than could have been possible, and thus lower living standards than could have been possible	Current Account Surplus	0%
That position on the government's budget which promotes growth as injections exceed withdrawals	Deficit	0%
Monetary and fiscal policies designed to reduce economic activity such as by reducing aggregate demand	Deflationary or Contractionary Policies	0%
Policies that are directed at aggregate demand, being either monetary or fiscal	Demand-side Policies	0%
The two types of government policy in alphabetical order	Demand-side Policy and Supply-side Policy	0%
A market-based supply-side policy in which rules, regulations, and barriers are reduced in order to increase innovation and investment, successful where markets are competitive and not under monopolies	Deregulation	0%
Those countries, of which it is debated as to whether they should concentrate their resources on achieving economic growth or improving people's basic needs	Developing Countries	0%
To spend more than one's income by either drawing on savings or borrowing on the value of one's assets by using them as security for a loan	Dissaving	0%
The value of an investment where there is a multiplier of 2	Double	0%
The social and economic progress of a nation of which economic growth is a necessary prerequisite	Economic Development	0%
An increase in the productive capacity of an economy, shown as in increase in either actual real gross domestic product of potential real gross domestic product	Economic Growth	0%
That which affects the structure of an economy by increasing the share of the economy devoted to services, due to an increase in productivity, and people working fewer hours thereby increasing their spending on services	Economic Growth	0%
That which can lead to a more optimistic business climate as firms' markets become bigger, allowing them to sell more and increase profits (assuming costs don't increase too much), promoting future expansion	Economic Growth	0%
That which can harm living standards as - for those who remain unemployed - relative living standards decrease, while those in work face longer hours threatening stress, family breakdown, &c.	Economic Growth	0%
That, the belief in which, makes demand-side policies politically controversial due to their interventionist nature	Economic Liberalism	0%
That which has the biggest affect on the marginal propensity to import	Elasticity of Aggregate Supply	0%
That which economic growth can harm as the increased consumption and investment results in more pollution of all types, while also fueling climate change	Environment	0%
A suggested way of viewing the environmental stock of a country, which like any other capital must be utilised effectively and sustainably	Environmental Capital	0%
The two flows from households to firms in the circular flow, in alphabetical order	Expenditure and Factor Services	0%
That one of the three principal measures from the circular flow of income, expenditure, and output model which best describes how resources are being used in an economy	Expenditure-side Estimate	0%
A strategy for achieving rapid economic growth through the promotion of export activity, particularly where the domestic market is insufficient alone for such growth	Export-led Growth	0%
The two flows from firms to households in the circular flow, in alphabetical order	Factor Incomes and Output of Goods and Services	0%
The labour, land, and capital that businesses need in order to provide goods and services	Factor Services	0%
The two main agents in the circular flow, in alphabetical order	Firms and Households	0%
That type of policy, the principal weaknesses of which are that expansionary policies can increase inflation and worsen the balance of payments position, while changes in taxes and long-term spending are slow and difficult to implement	Fiscal Policy	0%
That type of policy, the primary concern of which is in regards to the government budget deficit or surplus and the taxation and spending that created it	Fiscal Policy	0%
Measures that make changes to government spending, taxation, and thus borrowing, carried out by HM Treasury	Fiscal Policy	0%
The two types of demand-side policy in alphabetical order	Fiscal Policy and Monetary Policy	0%
A commonly used measure of income or wealth inequality that gives a country a score between 0 and 1, with a higher number representing greater inequality of distribution	Gini Coefficient	0%
The two sets of flows in the circular flow, in alphabetical order	Goods and Money	0%
That which economic growth benefits by increasing revenue from income, corporation, and value added tax, while decreasing the cost of welfare payments, allowing increasing public sector investment	Government Finances	0%
One of the three pairs between withdrawal and injection, relating to government	Government Spending and Taxation	0%
That which is measured by averaging together the income paid by firms, total output, and total expenditure	Gross Domestic Product	0%
That, which investment in would cause economic growth by increasing people's productivity and leading to fewer lost work days, and potentially later retirement	Healthcare	0%
The stock of skills, knowledge, and experience possessed by people, making them more productive and innovative	Human Capital	0%
That the supply of which would be increased by investment in education and training, thereby leading to economic growth	Human Capital	0%
One of the three pairs between withdrawal and injection, relating to foreign trade	Imports and Exports	0%
Where the benefits and opportunities provided by economic growth are incurred by every section of society	Inclusive Growth	0%
The flow of money paid regularly into factors of production	Income	0%
That which has been contributed to by an ageing population relying more on low retirement pensions, technological progress causing jobs to become more skilled - increasing high-end wages, and globalisation causing the outsourcing of low skilled labour	Income Inequality	0%
That one of the three principal measures from the circular flow of income, expenditure, and output model which best describes the way in which households earn their income	Income-side Estimate	0%
An addition to a stock such as putting money into a savings account	Inflow	0%
That, which investment in would cause economic growth by providing firms the communication and transport networks vital for production and trade	Infrastructure	0%
Where money flows into the circular flow in the form of investment (I), government spending (G), and exports (X)	Injection (J)	0%
The degree of responsiveness of demand to a change in the cost of money, i.e. the interest rate	Interest Elasticity of Demand for Money	0%
That a rise in which would incentivise firms to move savings into sterling, thus increasing demand for and thus the exchange rate of sterling	Interest Rate	0%
That body, influence in the form of voting power at which is much affected by a country's economic growth	International Monetary Fund	0%
The two types of supply-side policy in alphabetical order	Interventionist and Market-based	0%
Policies aimed at increasing supply in which the government plays a more active role	Interventionist Supply-side Policies	0%
Those policies that often take the form of government investment, such as in infrastructure, research, education, and support for firms via grants, consultancy, &c.	Interventionist Supply-side Policies	0%
The relationship between the price of an asset and the interest rate on the asset	Inverse Relationship	0%
That, the opportunity cost of which is to forego more consumer goods in the short term, much more noticeable in developing countries due to the small amount of existing spare capacity	Investment	0%
The salient factor affecting economic growth	Investment	0%
One of the three pairs between withdrawal and injection, relating to consumers and firms	Investment and Saving	0%
A market-based supply-side policy in which restrictions on the free market of labour such as trade unions are reduced or removed	Labour Market Reform	0%
The ease and cost with which assets can be turned into cash and used immediately as a means of exchange	Liquidity	0%
That which economic growth can improve as unemployment falls and wages rise, allowing people to increase consumption, particularly of non-necessity products, and potentially increasing home ownership	Living Standards	0%
Where real national output and the price level (aggregate supply and aggregate demand) are equal	Macroeconomic Equilibrium	0%
That, the seven principal examples of which are; economic growth, low unemployment, a low and stable inflation rate, a balance of payments equilibrium on the current account, a balanced government budget, greater income equality, and protection of the environment	Macroeconomic Objectives	0%
The proportion of additional income that people spend on imported goods and services	Marginal Propensity to Import (MPM)	0%
The proportion of additional income that is taken from people in the form of direct and indirect taxes	Marginal Propensity to Tax (MPT)	0%
Marginal propensity to save (MPS) + marginal propensity to tax (MPT) + marginal propensity to import (MPM)	Marginal Propensity to Withdraw (MPW)	0%
The proportion of additional income not spent domestically	Marginal Propensity to Withdraw (MPW)	0%
Policies aimed at increasing supply while reducing government intervention in the economy	Market-based Supply-side Policies	0%
That type of policy, the principal weakness of which is that there is a time lag in its affect on interest rates of about one to two years	Monetary Policy	0%
Measures that make changes to the money supply and interest rates as carried out by the Bank of England	Monetary Policy	0%
A committee of the Bank of England that meets monthly to decide whether to change the Bank Rate by looking at growth rates, the inflation rate, unemployment, the exchange rate, &c.	Monetary Policy Committee	0%
That, a persistent growth of which is the only cause of persistent inflation	Money Supply	0%
Where an increase or decrease in aggregate demand has a cumulative effect on the economy through the successive spending rounds it causes	Multiplier Effect	0%
1÷(1 - marginal propensity to consume) or 1 ÷ marginal propensity to withdraw	Multiplier (K)	0%
Where a decrease in an injection or increase in a withdrawal leads to a greater final decrease in GDP	Negative Multiplier	0%
Where an economy is producing below maximum potential output, resulting in unemployment and spare capacity	Negative Output Gap	0%
The accumulation of government borrowing	Net Debt	0%
A subtraction from a stock such as taking money out of a savings account	Outflow	0%
That which in terms of GDP can be seen as the gap between actual real gross domestic product and potential real gross domestic product (trend growth)	Output Gap	0%
That one of the three principal measures from the circular flow of income, expenditure, and output model which best describes the structure of an economy	Output-side Estimate	0%
That circumstance of households, firms, governments, &c. that made the 2007-08 recession so deep and slow to recover by reducing consumption and investment	Over-indebtedness	0%
A graph that demonstrates the inverse relationship between the wage inflation rate and the unemployment rate, not always the case, particularly in examples of very high inflation	Phillips Curve	0%
Where an increase in an injection or decrease in a withdrawal leads to a greater final increase in GDP	Positive Multiplier	0%
Where an economy is producing above maximum potential output such as by workers working overtime	Positive Output Gap	0%
An increase in a country's ability to produce goods and services because of an increase in the quantity or quality of resources, shown as an outward shift of the the production possibility frontier or aggregate supply curve	Potential Economic Growth	0%
A market-based supply-side policy in which nationalised industries are sold to the private sector, criticised by some as causing private and shareholder interests to trump public interest, particularly in strategic industries	Privatisation	0%
The measure of how much the government must borrow each year	Public Sector Net Cash Requirement	0%
That which reduces interest rates by increasing the demand for and thereby price of bonds, causing interest on said bonds to fall due to the inverse relationship between asset price and interest, leading to a fall in wider interest rates due to the transmission mechanism	Quantitative Easing	0%
A process whereby a central bank creates more money (mostly electronically) which it uses to buy financial assets (mostly government bonds) from investment companies which save the money, increasing bank deposits and thus the availability of credit, boosting investment and consumption	Quantitative Easing	0%
That which will increase when total injections exceed total withdrawals in the circular flow	Real Gross Domestic Product	0%
A period of two or more consecutive quarters of negative economic growth in which employment is falling, unemployment rising, and there is possibly disinflation	Recession or Downturn	0%
Where growth and employment are rising, unemployment falling, and the inflation rate beginning to rise	Recovery or Upturn	0%
Monetary and fiscal policies designed to increase economic activity such as by lowering unemployment	Reflationary or Expansionary Policies	0%
A deceleration in the growth rate, though still remaining positive	Slowdown	0%
The period during which economic growth is below the trend rate, with there being low inflation and higher unemployment	Slowdown or Recession/Downturn	0%
That which remains fixed until an inflow or outflow increases of decreases it respectively, such as the balance in a savings account	Stock	0%
Those policies, the main strengths of which are that; they can enable growth while avoiding inflationary pressure, may not increase government spending, and can result in investment that would not otherwise have happened	Supply-side Policies	0%
Policies that are directed the supply, being aimed at improving the efficiency of product and labour markets	Supply-side Policies	0%
Those policies, the main weaknesses of which are that; they can be subject to time lags or knowledge gaps (such as how people would response to tax changes), and can be very expensive, incurring an opportunity cost on the public budget	Supply-side Policies	0%
That position on the government's budget which slows growth as withdrawals exceed injections	Surplus	0%
Growth that does not compromise the living standards of future generations	Sustainable Economic Growth	0%
That, which would cause economic growth by increasing productivity and efficiency, thereby freeing up resources to produce additional goods and services	Technological Progress	0%
That which occurs through investment via research and development by firms, universities, and research institutions both domestically and abroad	Technological Progress	0%
The average productivity of all factors, measured as total output ÷ total amount of inputs used	Total Factor Productivity	0%
The phenomenon whereby gross domestic product fluctuates around its underlying trend, following a regular pattern	Trade/Business Cycle	0%
The way in which monetary policy affects general economic decisions such as a rise in the Bank Rate causing a rise in other institutions' interest rates	Transmission Mechanism	0%
The average rate of economic growth that is sustainable over a period of time without causing inflation	Trend Rate of Growth	0%
The lowest point of the trade cycle where growth is very low of negative, employment is low and unemployment high, and there is possibly deflation	Trough	0%
That which might sometimes be a good thing as it allows firms to expand quickly due to the available pool of labour, and imposes discipline on the labour market due to the ability to replace individuals units of labour	Unemployment	0%
A stock of all the assets people/firms/governments, &c own whether physical like houses or financial like shares	Wealth	0%
Where money flows out of the circular flow in the form of saving (S), taxation (T), and imports (M)	Withdrawal (W) or Leakage	0%

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