Edexcel A-Level Economics A: Definitions 191 Correctly Answered Questions Latest Update

Gross National Income (GNI) {Ans: The GDP of an economy, plus any income earned on investments/assets abroad, minus any income paid to foreigners on domestic investments/assets.}Organic growth {Ans: A firm growing through increasing the levels of factors of production it uses.}Vertical equity {Ans: Where people with different circumstances are treated differently but fairly.}Demand-side policy {Ans: Government policy that aims to alter aggregate demand in the economy.}Price elasticity of demand (PED) {Ans: A measure of the responsiveness of demand to changes in price.}Price mechanism {Ans: The process by which supply and demand interact to change the equilibrium price and quantity in a market.}Cartel {Ans: A group of products who collude to limit output in order to keep prices high.}Multiplier effect {Ans: The process by which an injection into the circular flow of income creates a larger change in the size of national income.}Phillips curve {Ans: A curve showing the relationship between inflation and unemployment. In the short run, as one falls the other rises. In the long run, unemployment remains at the NRU regardless of inflation.}Derived demand {Ans: The demand for a good or service due to its use in making