Economic Principles Terms (C)

Basic economic principles key terms beginning with C

  • Created by: Chloe
  • Created on: 19-04-13 17:42
capital
all inputs into production that have themselves been produced e.g. factories, machines and tools
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capital account of the balance of payments
the record of the transfers of capital to and from abroad
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capital adequacy ratio
the ratio of a bank's capital (reserves and shares) to its risk weighted assets
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capital expenditure
investment expenditure, expenditure on assets
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cartel
a formal collusie agreement
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central bank
banker to the banks and the government
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command economy
or centrally planned economy. an economy where all economic decisions are taken by the central authorities
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certificates of deposit
certificates issued by banks for dixed-term interest-bearing deposits. They can be resold by the owner to another party.
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ceteris paribus
latin for 'other things being equal'; the assumption made when making deductions from theories
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change in demand
this is the term used for a shift in the demand curve. it occurs when a determinant of demand other than price changes
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change in supply
the term used for a shift in the supply curve, occurring when a determinant other than price changes
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change in quantity demanded
the term used for a movement along the demand cure when price changes
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change in quantity supplied
the term used for a movement along the supply curve when price changes
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claimant unemployment
those in receipt of unemployment-related benefits
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clearing system
a system whereby inter-bank debts are settled
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close shop
where a firm agrees to employ only union members
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coase theorem
by sufferors from externalities doing deals with perpetrators (by levying charges or offering bries) the externality will be 'internalised' and the socially efficient level of output will be reached
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collateralised debt obligations
these are a type of security consisting of a bundle of fixed-income assets, such as corporate bonds, mortgage debt and credit-card debt
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collusive oligopoly
where oligopolists agree (formally or informally) to limit competition between themselves. They may set output quotas, fix prices, limit product promotion or development or agree not to 'poach' each others markets
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collusive tendering
where two or more firms secretly agree on the prices they will tender for a contract. These prices will be above thse which would be put in under a genuinely competitive tendering process
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command-and-control systems
the use of laws or regulations backed up by inspections and penalties (such as fines) for non-compliance
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commercial bills
bills of exchange used by firms
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common market
a customs union where the member countries act as a single market with free movement of labour and capital, common taxes and trade laws
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comparative advantage
a country has a comparative advantage over another in the production of a good if it can produce it at a lower opportunity cost ie. if it has to forgo less of other goods in order to produce it
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competition for corporate control
the competition for the control of companies through takeovers
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complementary goods
a pair of goods consumed together, as the price of one goes up, the demand for both goods will fall
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compounding
the process of adding interest each year to an initial capital sum
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compromise strategy
one whose worst outcome is better than the maximax strategy and whose best outcome is better than the maximin strategy
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conglomerate merger
when two firms in different industries merge
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constrained discretion
a set of principles or rules within which economic policy operates these can be informal or enshrined in law
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consumer durable
a consumer good that lasts a period of time, during which the consumer can continue gaining utility from it
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consumer sovereignty
a situation where firms respond to changes in consumer demand without being in a position in the long run to charge a price above average cost
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consumer surplus
the excess of what a person would have been prepared to pay for a good (ie. the utility) over what that person actually pays
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consumption
the act of using goods and services to satisfy wants. This will normally involve purchasing the goods and services
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consumption function
the relationship between consumption and national income. it can be expressed algebraically or graphically.
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consumption of domestically produced goods and services (Cd)
the direct flow of money payments from households to firms
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consumption smoothing
the act by households of smoothing their levels of consumption over time despot facing volatile incomes
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convergence of economies
when countries achieve similar levels of growth, inflation, budget deficits as a percentage of GDP, balance of payments etc.
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core workers
workers, normally with specific skills, who are employed on a permanent or long term basis
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cost-benefit analysis
the identification, measurement and weighing up of the costs and benefits of a project in order to decide whether or not it should go ahead
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cost-plus pricing (full-cost pricing)
when firms price their product by adding a certain profit mark-up to average cost
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cost-push inflation
inflation caused by persistent rises in costs of production (independently of demand)
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countervailing power
when the power of a monopolistic/oligopolistic seller is offset by powerful buyers who can prevent the price from being pushed up
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cournot model
a model of duopoly where each firm makes its price and output decisions on the assumption that its rival will produce a particular quantity
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credible threat (or promise)
one that its believable to rivals because it is in the threatener's interests to carry it out
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cross-price elasticity of demand
the percentage (or proportionate) change in quantity demanded of one good divided by the percentage (or proportionate) change in the price of another
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cross-price elasticity of demand (arc formula)
∆Qda/average Qda ÷ ∆Pb/average Pb
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cross-subsidise
to use profits in one market to subsidise prices in another
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crowding out
where increased public expenditure diverts money or resources away from private sector
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currency union
a group of countries (or regions) using a common currency
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current account balance of payments
exports of goods and services minus imports of goods and services plus net incomes and current transfers from abroad
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current account surplus (balance of payments)
inflows of money (from sale of exports etc.) exceed outflows of money (from purchase of imports etc.). It is a positive figure
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current expenditure
recurrent spending on goods and factor payments
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customs union
a free trade area with common external tariffs and quotas
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cyclical (or demand deficient) unemployment
disequilibrium unemployment caused by a fall in aggregate demand with no corresponding fall in the real wage rate
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Other cards in this set

Card 2

Front

capital account of the balance of payments

Back

the record of the transfers of capital to and from abroad

Card 3

Front

capital adequacy ratio

Back

Preview of the front of card 3

Card 4

Front

capital expenditure

Back

Preview of the front of card 4

Card 5

Front

cartel

Back

Preview of the front of card 5
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