For example, an increase in wages or the cost of raw materials. When inflation is caused by an increase in the costs of production. Measuring inflation by taking the average weighted price level of a basket of goods and comparing it between years. ConsumersĪ person who purchase goods and services for personal use. Examples could include strawberries and cream or milk and cereal. Two goods which are often consumed together. Competitive marketĪ market where a wide variety of producers are competing with each other to supply goods and services. These look to make profits by selling financial services to households and businesses. Commercial banks (also known as high street or retail banks) Measures unemployment by the number of individuals claiming unemployment benefit that week. (This is usually because it is purchased using borrowed money.) Claimant account This could include a factory or a coffee machine. The machinery and tools used in the creation of goods and services. It offers banking and other financial services to these members. Building societiesĪ financial institution which is entirely owned by its members. When government tax revenue exceeds expenditure (tax > spending). When government spending is greater than tax revenue (spending > tax). The interest rate set by the bank of England that influences market interest rates. Barriers to entryĬircumstances that could prevent a firm from successfully joining a market (selling a particular good or service). The part of the current account that records the sales and purchase of physical items between the UK and the rest of the world. When the UK’s exports of goods and services are greater than the values of imported goods and services. Balance of payments (current account) surplus When the value of the UK’s exports of goods and services are less than the value of imported goods and services. Balance of payments (current account) deficit Balance of paymentsĪ record of all financial transactions between the UK and the rest of the world. When the value of one currency rises in value to another. Average income from the sales of each individual good (total revenue/quantity).
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