| Term | Definition |
|---|
| Balance of Payments | Export reciepts minus import payments |
| Boom | A time when economic activity is high, and incomes and profits are increasing |
| Capital Resources | Man made good used to produce other goods |
| Circular Flow Model | A model that shows the relationship between sectors of the economy |
| Collective Goods | Goods provided by the government through the taxation system: includes both Mixed goods and Public goods |
| Commodity | A good or service |
| Consumer | A user of goods and services |
| Consumption | Household spending on goods and services (consumer spending) |
| Demerit Good | A good or service considered bad for us |
| Depression | A time of negative growth, incomes and profits may be falling |
| Direct Tax | Tax paid directly to the Inland Revenue Department (e.g. P.A.Y.E.) |
| Disposable Income | Income after tax |
| Entrepreneur | An organiser of resources |
| Export Receipts | Income/money coming into New Zealand from the overseas sector in return for our exports |
| Exports | Goods and services made in New Zealand and sold to the overseas sector |
| Factor Reward | Payment made to households by firms for providing resources |
| Factors of Production | The inputs into the production process - Land, Human resources and capital |
| Financial Sector | Acts as intermediary between households who save money and firms who borrow money for investment |
| Firm | A business in the private sector that produces goods and services |
| Foreign Exchange Market | Where currencies from a range of countries are bought and sold |
| Government Sector | Provides services such as police, hospitals, schools, etc |
| Household | A group of people living under one roof |
| Human Resources | Labour and Entrepreneurship |
| Import Payments | Money leaving New Zealand to the Overseas Sector in return for imports. |
| Imports | Goods and services brought by New Zealand from the overseas sector |
| Income | The flow that shows the payments made by firms to households for using resources (e.g. wages and salaries) |
| Income Tax | A direct tax on earned income |
| Independence | Self sufficient - not relying on anyone |
| Indirect Tax | Tax paid indirectly to a third party (e.g. frims collect tax (G.S.T.) from the consumer and passes it onto the Government) |
| Injection | Money that is put into the circular flow |
| Interdependence | A mutual reliance; when two sectors/firms rely on each other |
| Interest | The cost of borrowing. Payments made by firms to the financial sector in return for the money they have borrowed for investment. The reward for saving |
| Investment | The buying of capital by firms |
| Land | All natural resources |
| Market | A place or situation where an exchange takes place |
| Merit Good | A good or service considered good for us |
| Money Flow | The flow of money within the economy |
| Money Market | Connects savers (households), financial institutions and firms |
| Mixed Goods | Goods sold by both the private sector for profit and provided by the government (e.g. private schools and public schools) |
| Overseas Sector | New Zealand's trading partners throughout the rest of the world |
| P.A.Y.E. | Pay As You Earn (the most common type of income tax) |
| Producer | Someone who provides or creates goods and services |
| Progressive Tax | Tax that increases as income increases (e.g. in New Zealand the rates are 19.5%, 33% and 39% |
| Public Sector | The Government Sector |
| Quota | A restriction on the ammount of imports allowed into a country |
| Real Flow | These are the flows of the factors of production - Land, human resources and capital |
| Recession | A time when economic activityis low, and income and profits are low |
| Resource Market | Where resources are bought and sold |
| Sector | A part of the economy |
| Subsidy | A payment made by the Government to firms to help reduce the cost of production, increase output and reduce cost to consumers |
| Tariff | A tax on imports |
| Transfer Payment | A payment made by the Government to households |
| Withdrawl | Money that is taken out of the circular flow |
Combine with other sets
Share on Facebook
Share on MySpace