Econ

• Positive Externalities in Consumption diagram


  Benefits to 3rd parties as a result of the actions of consumers.

  
• Negative Externalities in Production diagram


  Costs to 3rd parties as a result of actions of producers.

  
• seasonal unemployment

  unemployment caused when an industry only operates at certain times of the year
• SRAS

  AS when at least one factor of production is fixed
• Purchasing Power Parity (PPP)

  exchange rate of one currency to another that compares cost of living in different countries through comparing a typical basket of goods
• labour force survey (LFS)

  measure of unemployment that surveys people to class them as employed, unemployed or inactive
• claimant count

  measure of unemployment; number of people receiving benefits for being unemployed
• hot money flows

  the flow of money from one country to another in order to earn short term profits on interest rate differences
• injection (GIE)


  spending power entering the circular flow of income resulting from investment, government spending and exports.
• index number


  an economic data figure that reflects price; quantity compared to the base year
• price level


  the average of current prices of goods and services
• spare capacity


  economy not operating and full employment, there is a negative output gap in the economy
• budget deficit


  when government spending exceeds tax revenue
• MPC


  the proportion of an increase in income spent on consumption
• multiplier

  when an increase in an injection will lead to an even greater increase of national income.$1/(1-MPC) =$$1/MPW$
• interest rate

  cost of borrowing
• GNI

  it is GDP plus net income paid into country by other countries for things such as dividends or interest
• inflation

  increase in the general price level
• national income

  total spending on goods and services
• circular flow of income

  the flow of income between households and firms including injections and withdrawals, injections are investment, gov spending and exports
• free rider problem

  people who don't pay for a public good still receive benefits from it so the private sector will under-provide the good as they cannot make a profit.
• giffen good


  an inferior good where higher price causes an increase in demand (reversing the usual law). The increase is due to the income effect of the higher price outweighing the substitution effect.
• veblen good


  a normal good where demand rises as price rises as people think more expensive goods are better quality so they get higher satisfaction. They are usually a luxury with a high positive YED.
• government failure


  occurs when government intervention in the economy causes an insufficient allocation of resources and a decline in economic welfare.
• rationality


  weighing up the costs and benefits of an activity, maximising utility per penny spent as well as having perfect information.