Past paper 2 definitions (2013-2019)
Could not find May 18, Nov 17 paper 2 mark schemes :(
Appreciation (M15, M13) An increase in the value of a currency in a floating exchange rate system
Bilateral trade A trade agreement between 2 countries which aims to lower trade barriers or to
agreement (M15) increase trade
Budget deficit (N16) When government spending is greater than government revenues
Business confidence The expectations of businesses about the future of economic conditions & affects
(N13) the level of investment
Comparative When a country can produce a product at a lower opportunity cost that another
advantage (N18, M14) country
Consumption (M16, N15) spending by individuals or households on goods & services
Current account (N13) A measure of the flow of funds from trade in goods & services, net income flows &
net transfers of money
Current account deficit when the net flow of money from trade in goods & services, income flows &
(M17) transfers is negative
Customs union (M16, A form of trade agreement where members trade freely amongst themselves &
M15) have common external trade policies with non-members
Deflation (N13) A sustained decrease in the average level of prices in an economy
Depreciation (N19) a decrease in the value of one currency against another currency in a floating
exchange rate system
Devaluation (N18) A decrease in the value of one currency in a fixed exchange rate system
Direct taxes (M15) Taxes on incomes of households & firms
Diversification (N19, N13) A process resulting in the production of a greater variety of goods & services that
a country produces
Dumping (M19) selling of goods in another country at a price below the cost of production
Economic development A broad concept involving an improvement in standards of living & improved
(N16) health & education
Economic growth (N19, An increase in real GDP of an economy in a given period of time
N15, N13)
Exchange rate (N19, N14, The value of one currency expressed in terms of another currency
M13)
Financial account (M14) The net balance arising from flows of foreign direct investment & portfolio
investment
Fiscal policy (M19, M16) A demand-side policy conducted by the government using changes in taxation &
government expenditure to achieve economy objectives relating to inflation,
unemployment & long-term economic growth
Fixed exchange rate A currency's value is fixed against the value of another currency
(N15)
Could not find May 18, Nov 17 paper 2 mark schemes :(
Appreciation (M15, M13) An increase in the value of a currency in a floating exchange rate system
Bilateral trade A trade agreement between 2 countries which aims to lower trade barriers or to
agreement (M15) increase trade
Budget deficit (N16) When government spending is greater than government revenues
Business confidence The expectations of businesses about the future of economic conditions & affects
(N13) the level of investment
Comparative When a country can produce a product at a lower opportunity cost that another
advantage (N18, M14) country
Consumption (M16, N15) spending by individuals or households on goods & services
Current account (N13) A measure of the flow of funds from trade in goods & services, net income flows &
net transfers of money
Current account deficit when the net flow of money from trade in goods & services, income flows &
(M17) transfers is negative
Customs union (M16, A form of trade agreement where members trade freely amongst themselves &
M15) have common external trade policies with non-members
Deflation (N13) A sustained decrease in the average level of prices in an economy
Depreciation (N19) a decrease in the value of one currency against another currency in a floating
exchange rate system
Devaluation (N18) A decrease in the value of one currency in a fixed exchange rate system
Direct taxes (M15) Taxes on incomes of households & firms
Diversification (N19, N13) A process resulting in the production of a greater variety of goods & services that
a country produces
Dumping (M19) selling of goods in another country at a price below the cost of production
Economic development A broad concept involving an improvement in standards of living & improved
(N16) health & education
Economic growth (N19, An increase in real GDP of an economy in a given period of time
N15, N13)
Exchange rate (N19, N14, The value of one currency expressed in terms of another currency
M13)
Financial account (M14) The net balance arising from flows of foreign direct investment & portfolio
investment
Fiscal policy (M19, M16) A demand-side policy conducted by the government using changes in taxation &
government expenditure to achieve economy objectives relating to inflation,
unemployment & long-term economic growth
Fixed exchange rate A currency's value is fixed against the value of another currency
(N15)
