Despite the problem of scarcity, people do not always want producers to use the most efficient production methods

The problem of scarcity would disappear if the world’s population grew to ensure more labour was available

A producer who uses no more resources than it needs must display productive efficiency

The world’s economies were as integrated 50 years ago as they are today

The same as capital goods, such as plant, buildings, vehicles and machinery

Products which one firm buys off another and then uses up in its own products

All inputs bought by firms, including labour and raw materials

Imports

The same as the term intermediate goods and services

The same as the term consumer goods and services

All goods and services except those traded second hand

Goods and services which are finished as far as the economy is concerned

Purchases of capital goods are called investment

GDP equals the total value of wages received by households

In a simple economy with just households and firms, the value of investment equals the value of saving

In a simple economy with just households and firms, the value of investment plus consumers’ expenditure equals GDP

GDP measures the value of all the goods and services produced in the economy

GDP stands for gross domestic product

GDP excludes intermediate goods and services

GDP equals wages plus trading profits