Statistics for Economics: Topic 12.5, Year 2 Definitions

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Definition	Answer	% Correct
The price of one currency expressed in terms of another.	The Exchange Rate	100%
Operates when a currency's value is determined in the free market through the interaction of the forces of supply and demand.	A Floating Exchange Rate	50%
Dishonest or fraudulent behaviour by those in authority and often takes the form of bribery or theft.	Corruption	50%
Records the transfer of ownership of UK or foreign businesses between residents in different countries.	Foreign Direct Investment	50%
The trend for many markets to become worldwide in scope.	Globalisation	50%
Refers to the basic facilities available to a society, such as transport and communication links which support economic activity.	Infrastructure	50%
The exchange of goods and services across national frontiers.	International Trade	50%
A record of a country's trading and financial transactions with the rest of the world.	The Balance of Payments	50%
Exists when two or more countries use the same currency as well as a single monetary and foreign exchange policy.	A Currency Union	0%
Exists when inflows of currency recorded on the current account are smaller than outflows over some period of time.	A Current Account Deficit	0%
Exists when inflows of currency recorded on the current account exceed outflows over some period of time.	A Current Account Surplus	0%
An action by governments or other authorities implemented with the intention of reducing aggregate demand.	A Deflationary Policy	0%
Exists when a currency is maintained at a stable value in relation to other currencies.	A Fixed Exchange Rate	0%
Someone who benefits from a good or a service without paying for it.	A Free Rider	0%
Shows how a single currency changes in value over time against a 'basket' of other currencies.	A Trade-Weighted Index	0%
The value of all physical assets used in production in the economy that are still in use, such as machinery, property and vehicles.	Capital Stock	0%
When one country can produce a good or service at a lower opportunity cost than another.	Comparative Advantage	0%
Policies designed to reduce aggregate demand in the economy and, with it, consumer spending on imports.	Expenditure-reducing Policies	0%
Operates with the aim of diverting consumers' expenditure away from imports and towards domestically produced goods and services.	Expenditure-switching Policies	0%
The voluntary transfer of financial or physical resources from one country or organisation to a recipient country. It is also called official development assistance (ODA).	Foreign Aid	0%
Refers to funds that flow between financial markets as investors seek to earn the highest possible returns.	Hot Money	0%
The knowledge and skills possessed by employees that contribute to their ability to create economic value.	Human Capital	0%
A country's GDP divided by the size of its population.	Income Per Capita	0%
The planned spending by firms that adds to an economy's capital stock.	Investment	0%
Refers to financial flows between economies arising from the purchase and sale of financial assets such as shares and bonds.	Portfolio Investment	0%
An exchange rate based on the cost of a common basket of goods and services in different countries.	Purchasing Power Parity	0%
A part of the current account balance and measures the earnings from export minus expenditure on imports.	The Balance of Trade	0%
States that the rate of economic growth depends upon an economy's level of savings and the productivity of its investment.	The Harrod-Domar Model	0%
The proportion of a rise in income that is spent on imported products.	The Marginal Propensity to Import	0%
States that currency devaluation will only lead to an improvement in the balance of trade element of the current account if the sum of the elasticities of demand for imports and exports is greater than one.	The Marshall-Lerner Condition	0%
Contains those businesses that make direct use of natural resources such as minerals and land.	The Primary Sector	0%