Edexcel A-level
Economics Theme 2
LATEST 2024
Active population - ANS-Those in work or actively seeking work; also known as the
labour force.
Activity rate or participation rate - ANS-The number of those in work or unemployed
divided by the population of working age expressed as a percentage.
Actual growth - ANS-Economic growth as measured by recorded changes in real GDP
over time.
Aggregate demand - ANS-The total of all demands or expenditures in the economy at
any given price.
Aggregate demand curve - ANS-Shows the relationship between the price level and
equilibrium national income. As the price level rises the equilibrium level of national
income falls.
Aggregate supply curve - ANS-The relationship between the average level of prices in
the economy and the level of total output.
Animal spirits - ANS-Business confidence: the mood of managers and owners of firms
about the future of their industry and the wider economy.
, Anticipated inflation - ANS-Increases in prices which economic actors are able to predict
with accuracy.
Balance of payments account - ANS-A record of all financial dealings over a period of
time between economic agents of one country and all other countries.
Balance of trade - ANS-The value of exports minus imports.
Balanced budget - ANS-A statement of spending and income plans by government
where spending is equal to its receipts, mainly tax revenues.
Bank of England base rate - ANS-A rate of interest charged by the Bank of England to
banks to borrow money overnight. It is the most important interest rate in the UK
financial system because it influences other interest rates in the UK such as savings
rates and rates of interest on loans by banks.
Boom or peak - ANS-Period of time when the economy is growing strongly and is
operating above its productive potential.
Bottlenecks - ANS-Supply-side constraints in a particular market in an economy which
prevent higher growth for the whole economy.
Budget - ANS-A statement of the spending and income plans of an individual firm or
government. The Budget is the yearly statement on government spending and taxation
plans in the UK.
Budget deficit - ANS-A deficit which arises because government spending is greater
than its receipts. Government therefore has to borrow money to finance the difference.
Budget surplus - ANS-A government surplus arising from government spending being
less than its receipts. Government can use the difference to repay part of the National
Debt.
Capital and financial accounts - ANS-That part of the balance of payments account
where flows of savings, investments and currency are recorded.
Circular flow of income - ANS-A model of the economy which shows the flow of goods,
services and factors and their payments around the economy.
Closed economy - ANS-An economy where there is no foreign trade.
Consumer Prices Index (CPI) - ANS-A measure of the price level used across the
European Union and used by the Bank of England to measure inflation against its
target.
Economics Theme 2
LATEST 2024
Active population - ANS-Those in work or actively seeking work; also known as the
labour force.
Activity rate or participation rate - ANS-The number of those in work or unemployed
divided by the population of working age expressed as a percentage.
Actual growth - ANS-Economic growth as measured by recorded changes in real GDP
over time.
Aggregate demand - ANS-The total of all demands or expenditures in the economy at
any given price.
Aggregate demand curve - ANS-Shows the relationship between the price level and
equilibrium national income. As the price level rises the equilibrium level of national
income falls.
Aggregate supply curve - ANS-The relationship between the average level of prices in
the economy and the level of total output.
Animal spirits - ANS-Business confidence: the mood of managers and owners of firms
about the future of their industry and the wider economy.
, Anticipated inflation - ANS-Increases in prices which economic actors are able to predict
with accuracy.
Balance of payments account - ANS-A record of all financial dealings over a period of
time between economic agents of one country and all other countries.
Balance of trade - ANS-The value of exports minus imports.
Balanced budget - ANS-A statement of spending and income plans by government
where spending is equal to its receipts, mainly tax revenues.
Bank of England base rate - ANS-A rate of interest charged by the Bank of England to
banks to borrow money overnight. It is the most important interest rate in the UK
financial system because it influences other interest rates in the UK such as savings
rates and rates of interest on loans by banks.
Boom or peak - ANS-Period of time when the economy is growing strongly and is
operating above its productive potential.
Bottlenecks - ANS-Supply-side constraints in a particular market in an economy which
prevent higher growth for the whole economy.
Budget - ANS-A statement of the spending and income plans of an individual firm or
government. The Budget is the yearly statement on government spending and taxation
plans in the UK.
Budget deficit - ANS-A deficit which arises because government spending is greater
than its receipts. Government therefore has to borrow money to finance the difference.
Budget surplus - ANS-A government surplus arising from government spending being
less than its receipts. Government can use the difference to repay part of the National
Debt.
Capital and financial accounts - ANS-That part of the balance of payments account
where flows of savings, investments and currency are recorded.
Circular flow of income - ANS-A model of the economy which shows the flow of goods,
services and factors and their payments around the economy.
Closed economy - ANS-An economy where there is no foreign trade.
Consumer Prices Index (CPI) - ANS-A measure of the price level used across the
European Union and used by the Bank of England to measure inflation against its
target.
