Scribd
Upload
167 views2 pages

IGCSE Economics Unit 4 Keyterms

This document defines and explains 35 key economic terms related to macroeconomics: 1. It distinguishes between merit goods, which are more beneficial than perceived, and demerit goods, which are more harmful than perceived and produce negative externalities. 2. It defines public goods as non-rival and non-excludable, leading to free riders, and monopolies as single sellers of a product. 3. It also outlines terms related to unemployment, inflation, taxes, fiscal and monetary policy, and government intervention in markets.

Uploaded by

NIRAJ VENKAT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
167 views2 pages

IGCSE Economics Unit 4 Keyterms

This document defines and explains 35 key economic terms related to macroeconomics: 1. It distinguishes between merit goods, which are more beneficial than perceived, and demerit goods, which are more harmful than perceived and produce negative externalities. 2. It defines public goods as non-rival and non-excludable, leading to free riders, and monopolies as single sellers of a product. 3. It also outlines terms related to unemployment, inflation, taxes, fiscal and monetary policy, and government intervention in markets.

Uploaded by

NIRAJ VENKAT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

UNIT 4 KEYTERMS WS

1. Merit Goods – These goods are more beneficial than people think.
2. Demerit goods – These goods are more harmful than people think. These goods produce
negative externalities/ external cost.
3. Public Goods – These goods are non rival and non excludable. There will be free riders.
4. Monopoly – Single seller for a product.
5. Full Employment – Most of the people who are willing and able to work are able to find job.
3 % of unemployment is acceptable.
6. Unemployed People – People who are willing and able to work, but not able to get job.
7. Unemployment rate – Number of unemployed divided by labour force.
8. Labour force Participation – It is the sum of all employed workers divided by the working
age population.
9. Price Stability – It means that the price level in the economy is not changing significantly
over time.
10. Economic Growth – It means increase in real GDP in short run and increase in productive
potential in long run.
11. Balance of Payment Stability – A part of BOP is its record of import expenditure and export
revenue. Import and export should be equal.
12. Redistribution of Income – Income should be redistributed from rich to poor by taxing
heavily on rich and spending more for betterment of poor.
13. Direct Tax – Tax on income and wealth. It is progressive in nature.
14. Indirect Tax – Tax on goods and services. Tax on expenditure. Burden can be passed on to
others. It is regressive in nature.
15. Inelastic Demand – For a large change in price, there will be small change in quantity
demanded.
16. Elastic Demand – For a small change in price, there will be large change in quantity
demanded.
17. Progressive Tax System – Tax rate increases as income increases.
18. Regressive Tax System – Tax rate increases as income decreases
19. Proportional Tax System – Same tax rate for everyone.
20. Inflation – An increase in price level in the economy over a period of time.
21. Recession – Its a situation where there will be negative economic growth for consecutive 2
quarters.
22. Fiscal Policy – It is a demand side policy made by government by using tax and its
expenditure to influence aggregate demand.
23. Monetary Policy - It is a demand side policy made by central bank by using rate of interest,
money supply and exchange rate to influence aggregate demand.
24. Supply side Policy – These policies are designed to increase aggregate supply and hence
increase productive potential.
25. Contractionary Fiscal Policy – It is used during inflation. Tax will get increased and
government expenditure will get decreased to decrease AD.
26. Expansionary Fiscal Policy – It is used during recession. AD will get increased by
decreasing tax and increasing government expenditure.
27. Contractionary Monetary Policy – It is used during inflation. ROI will get increased to
decrease AD.
28. Expansionary Monetary Policy - It is used during recession. AD will get increased by
decreasing ROI.
29. Subsidies – Monetary benefit given by government to increase production and consumption
of some products.
30. Minimum Price – It is the price floor fixed by the government. Producer can charge more
than the minimum price but not less than of it.
31. Maximum Price – It is the price CEILING fixed by the government. Producer should charge
less than the maximum price.
32. Competition Policy – Government decreases power of monopoly by giving more
competition.
33. Environmental Policy – Government provides tradable permits of pollution. Firm can
pollute only to the given limit. If they pollute more either they have to pay fine or buy
permits from other firms.
34. Tradable Permits – It is the limit allocated to the firms to pollute.
35. Regulation – Rules and laws which protect people.
36. GDP – IT is the total value of final goods and services produced in a country over a period
of time.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy