Level 3 Level 5
Level 4

Unit 5.4


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Gross domestic product (GDP)
The total value of goods and services produced in an economy in a year
Economic growth
The percentage increase in GDP per year (this can be negative).
Output
The amount of goods and services produced in a period of time
Resources
The land, labour and machinery that are used to produce goods and services
Investment
Spending on equipment and plant that helps contribute to production
Human capital investment
Spending on training and education which allows workers to be able to produce more output in the future
Physical capital investment
Spending on new assets such as factories or machinery which allows a firm to produce more output in the future
Grants
Sums of money provided by the Government to encourage a particular project or activity
Infrastructure
Road, rail and air links that allow people and output to move speedily around a country and which helps trade
Less economically developed countries (LEDCs)
These are countries that have a low GDP and where the average standard of living is low
Standard of living
The amount of goods and services a person can buy with their income in a year
GDP per capita
The value of output produced by a country in a year divided by the population of that country
Quality of life
An individual's overall sense of well being. This can be measured by health and education as well as the amount of goods and services a person can buy.
Infant mortality rates
The percentage of babies that do not survive past their 5th birthday
Income inequalities
Where there is a difference in income between different groups of people within a country
Life expectancy rates
The average age which people are expected to live from birth
Literacy rates
The percentage of adults who are able to read and write
Non renewable resources
Resources which are limited in supply and will eventually run out e.g. oil and coal
Sustainable economic growth
An increase in GDP that minimises negative externalities faced by future generations
Renewable resources
Resources that are not limited in supply and are naturally replaced in the environment e.g. solar power and wind power
Corporate Social Responsibility (CSR)
A measure of the impact that a business has on society and the environment as a result of its operations
Greenwash
Where a business tries to give the impression that it is environmentally friendly when its claims may not be entirely true or justified
Ethical responsibility
Where a business takes a moral standpoint and ensures that its behaviour does not impact stakeholder groups in a negative way; it tries to do the right thing.
Environmentally friendly
Where a business acts or produces products in a way that minimises damage to the environment
Taxation
A payment made to the Government by consumers and firms. It is usually based on spending or incomes.
Internalising an externality
Where an unconsidered external cost is turned into a considered private cost which is paid in money
Incentives
Measures designed to encourage a person to act in a different way - a way which may be considered preferable or desirable.
Legislation
Laws that are introduced by the Government
Ban
A law that makes the production of a product or other business activity illegal
Regulation
Restrictions and rules placed on business activities, which may be monitored by an independent body or by the industries themselves