Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions (Latest 2025) When a country's output of a product per unit of input is greater than that of any other country. - Correct Answers ✅Absolute advantage When a person does not have the income or wealth to fulfil their basic needs. - Correct Answers ✅Absolute poverty The total demand/spending in an economy at a given price level over a given period of time. Made up of consumption, investment, government spending and net external demand.
- Correct Answers ✅Aggregate Demand (AD)
The total amount of goods and services that can be supplied in an economy at a given price level over a given period of time. - Correct Answers ✅Aggregate Supply (AS) The transfer of resources from one country to another. - Correct Answers ✅Aid Where the price of a good is equal to the price consumers are willing to pay. This occurs when all resources are allocated efficiently. - Correct Answers ✅Allocative efficiency 1 / 3
Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions (Latest 2025) Where buyers have more information than sellers in a market, or vice versa. - Correct Answers ✅Asymmetric information Parts of fiscal policy that automatically react to changes in the economic cycle. - Correct Answers ✅Automatic stabilisers The cost of production per unit of output. - Correct Answers ✅Average Cost (AC) The revenue per unit sold. - Correct Answers ✅Average Revenue (AR) Where a firm merges with or takes over a firm further back in the production process. - Correct Answers ✅Backward vertical integration A record of the international transactions of an economy. - Correct Answers ✅Balance of payments The official rate of interest set by the central bank (e.g. by the Monetary Policy Committee of the Bank of England) - Correct Answers ✅Bank rate 2 / 3
Edexcel A-Level Economics A: Definitions
Questions with Complete Solutions (Latest 2025) Potential difficulties that make it hard for firms to enter a market. - Correct Answers ✅Barriers to entry Potential difficulties that make it hard for firms to leave a market. - Correct Answers ✅Barriers to exit Economic activity that occurs without taxation and government intervention. - Correct Answers ✅Black market When government spending exceeds tax revenues. - Correct Answers ✅Budget deficit When tax revenues exceed government spending. - Correct Answers ✅Budget surplus A part of the balance of payments that shows transfers of non-monetary and fixed assets into and out of the economy. - Correct Answers ✅Capital account of the balance of payments A group of products who collude to limit output in order to keep prices high. - Correct Answers ✅Cartel
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