Economic Issues
- Gross Domestic Product (GDP) is the total value of output of goods and services in a country in one year.
- Recession is when there is a period of falling GDP.
- Inflation is the increase in the average price level of goods and services over time.
- Unemployment exists when people who are willing and able to work cannot find a job.
- Economic growth is when a country’s GDP increases – more goods and services are produced than in the previous year.
- Balance of payments records the difference between a country’s exports and imports.
- Real income is the value of income, and it falls when prices rise faster than money income.
- Exports are goods and services sold from one country to other countries.
- Imports are goods and services bought in by one country from other countries.
- Exchange rate is the price of one currency in terms of another, for example, £1 : $1.5.
- Exchange rate depreciation is the fall in the value of a currency compared with other currencies.
- Fiscal policy is any change by the government in tax rates or public sector spending.
- Direct taxes are paid directly from incomes, for example, income tax or profits tax.
- Indirect taxes are added to the prices of goods and taxpayers pay the tax as they purchase the goods, for example, VAT.
- Disposable income is the level of income a taxpayer has after paying income tax.
- Import tariff is a tax on an imported product.
- Import quota is a physical limit on the quantity of a product that can be imported.
- Monetary policy is a change in interest rates by the government or central bank, for example, the European Central Bank.
- Exchange rate appreciation is the rise in the value of a currency compared with other currencies.
- Supply side policies try to increase the competitiveness of industries in an economy against those from other countries. Policies to make the economy more efficient.
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