Economics Key Terms

3. Increasing opportunity costs would be represented by what shape PPF?
4. A general explanation of a set of interrelated events.
6. A good which is not scarce and therefore has zero opportunity cost
7. The value of the next best alternative that must be given up or sacrificed in order to obtain something else.
8. Normative Economic is based on this.
10. Wrote the book, “The General Theory of Employment, Interest and Money” (often abbreviated to “the General Theory”).
11. The satisfaction derived from consuming something.
13. The study of choices leading to the best possible use of scarce resources in order to satisfy unlimited human needs and wants.
16. “The UK Government should spend more on education” in an example of this type of statement.
18. Refers to the situation in which available resources, or factors of production, are finite, whereas wants are infinite.
19. Divide by this to calculate the average National Output per person.
20. Withdrawals from the Circular Flow of Income.
22. Measures the value of current output valued at current prices.
23. Positive Economics uses this type of method to arrive at knowledge about the economic world.
25. Simple model that illustrates some of the economic concepts and relationships which help us understand the overall economy.
26. A price index commonly used to convert nominal GDP to real GDP.

1. At “Full Employment” what still exists in the economy?
2. Represents average growth over long periods of time.
5. Type of injection to an economy selling to other countries.
9. The Factor of Production for which Profits are received in return for its provision.
10. The concept of one extra unit.
12. “Inflation has risen to 9.3% in H1 2021” is an example of this type of statement.
14. A straight line PPF would indicate the presence of what type of opportunity cost?
15. Method used to apportion or divide something up between its interested users.
17. Measures the value of current output valued at constant (base year) prices.
21. What type of hand did Adam Smith use to describe the mechanism by which markets (based on the self-interested behaviour of decision makers) allocate scarce resources in the most optimal manner.
24. The output represented by the long-term growth trend.
27. Refers to actual GDP lies above or below potential GDP.