Economies of Scale
The increase in efficiency of production as the number of goods being produced increases.
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Positive Externality
This occurs when the consumption or production of a good causes a benefit to a third party. ·For example, when you consume education you get a private benefit. But there are also benefits to the rest of society.
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Negative Externalty
Negative externalities occur when production and/or consumption impose external costs on third parties outside of the market for which no appropriate compensation is paid.
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Actual and potential buyers of a product or service.
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Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen
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The money one has saved, esp. through a bank or official scheme.
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Private Good
A product that must be purchased in order to be consumed, and whose consumption by one individual prevents another individual from consuming it.
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Public Good
A product that one individual can consume without reducing its availability to another individual and from which no one is excluded.
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Merit Good
Goods or services (such as education and vaccination) provided free for the benefit of the entire society by a government, because they would be under-provided if left to the market forces or private enterprise.
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Quantitative Easing
A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market.
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Two periods of negative growth.
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The fee charged by a lender to a borrower for the use of borrowed money.
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A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior product
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Normal Profit
When economic profit is equal to zero; this occurs when the difference between total revenue and total cost (explicit and implicit costs) equals zero.
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Negative Output Gap
An economic measure of the difference between the actual output of an economy and the output it could achieve when it is most efficient, or at full capacity.
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Aggregate Demand
The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.
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Aggregate Supply
The total supply of goods and services produced within an economy at a given overall price level in a given time period.
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Accelerator Theory
An economic theory that suggests that as demand or income increases in an economy, so does the investment made by firms.
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Balance of Payments
A record of all transactions made between one particular country and all other countries during a specified period of time.
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Budget Deficit
A financial situation that occurs when an entity has more money going out than coming in.
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Budget Surplus
A situation in which income exceeds expenditures.
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Capital Goods
Any tangible assets that an organization uses to produce goods or services such as office buildings, equipment and machinery. Consumer goods are the end result of this production process.
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Circular Flow of Income
The circular flow of income is a neoclassical economic model depicting how money flows through the economy.
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Centrally Planned Economy
An economic system in which economic decisions are made by the state or government rather than by the interaction between consumers and businesses.
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Cyclical Unemployment
Unemployment due to a lack of demand.
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The using up of goods and services by consumer purchasing or in the production of other goods.
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CPI (Consumer Price Index)
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.
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Cross Elasticity of Demand
The cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good.
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Reduction of the general level of prices in an economy.
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A broad term that implies an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste and inefficiency.
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Economic Welfare
A branch of economics that focuses on the optimal allocation of resources and goods and how this affects social welfare.
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Price Elasticity of Demand
A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.
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Exchange Rate
One currency in terms of another.
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Excess Demand
Excess of the quantity demanded of a good or service, at a given price, over its supply at that price.
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Excess Supply
A situation that can occur in a market or business where the amount of a product provided or material obtained exceeds the amount required or demanded.
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Factor Mobility
The degree to which a factor of production, such as labour or capital, is able to move.
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Free Market
A market economy based on supply and demand with little or no government control.
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The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis.
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Government Spending
Government spending (or government expenditure) includes all government consumption and investment but excludes transfer payments[1] made by a state
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Income Tax
A tax that governments impose on financial income generated by all entities within their jurisdiction.
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Indirect Cost
An expense (such as for advertising, computing, maintenance, security, supervision) incurred in joint usage and, therefore, difficult to assign to or identify with a specific cost object or cost centre (department, function, program).
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The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
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The workers in a particular country, industry, or company considered as a group.
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Labour Productivity
A measurement of economic growth of a country.
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Market Failure
An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers.
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Monetary Policy
The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates.
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National Debt
Total outstanding borrowings of a central government comprising of internal (owing to national creditors) and external (owing to foreign creditors) debt incurred in financing its expenditure.
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A situation in which a particular market is controlled by a small group of firms.
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Price Fixing
Establishing the price of a product or service, rather than allowing it to be determined naturally through free-market forces.
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A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity.
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The amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise.
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Social Costs
The expense to an entire society resulting from a news event, an activity or a change in policy.
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Social Benefits
The increase in the welfare of a society that is derived from a particular course of action. Some social benefits, such as greater social justice, cannot easily be quantified.
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A method of production where a business or area focuses on the production of a limited scope of products or services in order to gain greater degrees of productive efficiency within the entire system of businesses or areas.
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Structural Unemployment
Unemployment resulting from changes in the basic composition of the economy. These changes simultaneously open new positions for trained workers.
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A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public.
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An involuntary fee levied on corporations or individuals that is enforced by a level of government in order to finance government activities.
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Unemployment occurs when a person who is actively searching for employment is unable to find work
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Economic Growth
An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.
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Fiscal Policy
Government spending policies that influence macroeconomic conditions. These policies affect tax rates, interest rates and government spending, in an effort to control the economy.
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Supply Side Policy
A policy intended to improve conditions favourably, which encourages supply in an economy. For example improving education would increase the supply of educated workers in the workforce.
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Card 2


This occurs when the consumption or production of a good causes a benefit to a third party. ·For example, when you consume education you get a private benefit. But there are also benefits to the rest of society.


Positive Externality

Card 3


Negative externalities occur when production and/or consumption impose external costs on third parties outside of the market for which no appropriate compensation is paid.


Preview of the back of card 3

Card 4


Actual and potential buyers of a product or service.


Preview of the back of card 4

Card 5


The loss of potential gain from other alternatives when one alternative is chosen


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