Microeconomics, Macroeconomics, International Economics, and Development Economics Terms

For students taking the International Baccalaureate course in Economics, these terms must be learned so that students may utilize these definitions within their papers. Paper 2 includes definition questions, so this study set should help! Definitions are based on the Economics Classroom thanks to Jason Welker. Note that not all definitions are here. Only the important terms and definitions are studied here.
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absolute poverty
The state of people who live on less than $1.25 per day (purchasing power parity), as defined by the World Bank. Generally, such individual are unable to afford the basic necessities of life: food, shelter, education, health, etc.
ad valorem tax
An indirect tax which are a percentage of the price of the good.
aggregate demand
A schedule or curve which shows the total demand for the goods and services of a nation at a range of price levels and at a given period of time.
aggregate supply
The total amount of goods and services that all the firms in all the industries in a country will produce at various price levels in a given period of time.
allocative efficiency
When the level of output that society demands is produced by the firms in a market. If the marginal benefit enjoyed by consumers equals the marginal cost faced by producers, allocative efficiency is achieved. Only in perfect competition will allocative efficiency be achieved in the long-run, since the price of the good equals the marginal cost of the producers. In imperfectly competitive markets, the price will always be higher than the marginal cost of the firms, indicating that resources are under-allocated towards the product.
appreciation
An increase in the value of one currency relative to another, resulting from an increase in demand for or a decrease in supply of the currency on the foreign exchange market.
balance of payments
Measures all the monetary exchanges between one nation and all other nations. Includes the current account, capital account, and the financial account.
black market
Informal, unofficial markets in which goods are exchanged free of government control. Black market sometimes emerge if price controls exist in the formal market for the good. For example, if the government sets a price ceiling on gasoline, shortages will arise and it may become available on a black market for a price higher than that allowed by the government.
bond
A certificate of debt issued by a company or a government to an investor.
business cycle
A model showing the short run periods of contraction and expansion in output, resulting from fluctuations in the level of aggregate demand, experienced by an economy over a period of time.
capital
Human-made resources (machinery and equipment) used to produce goods and services; goods which do not directly satisfy human wants.
circular flow model
A model of the macroeconomy that shows the interconnectedness of businesses, households, government, banks and the foreign sectors in resource markets and product markets. Money flows in a circular direction, and goods, services and resources flow in the opposite direction.
common access resources
Natural resources over which there is no established private ownership. They are owned by no one, thus available to anyone to use. Their existence gives rise to the tragedy of the commons.
common market
A free trade agreement in with all the characteristics of a customs union, but in which the member nations also remove all barriers to the flow of factors of production between them. Labor and capital can move between member states without any government interference.
consumer price index
An index which measures the price of a fixed market basked of consumer goods bought by a typical consumer. Used to calculate the inflation rate in a nation.
consumer surplus
The additional benefit enjoyed by consumers who are willing to pay more for a product than the market price. Graphically it is the area of the triangle below the demand curve and above the equilibrium price, out to the equilibrium quantity.
consumption
A component of a nation's aggregate demand, measures the total spending by domestic households on domestically produced goods and services.
contractionary fiscal policy
A demand-side policy whereby government increases taxes or decreases it expenditures in order to reduce aggregate demand. Could be used in a period of high inflation to bring the inflation rate down.
contractionary monetary policy
A demand-side policy whereby the central bank reduces the supply of money (reserve requirements), increasing interest rates and decreasing discount rates to reduce aggregate demand. Could be used to bring down high inflation rates.
cost-push inflation
An increase in the average price level resulting from a decrease in aggregate supply. Usually caused by an increase in resource costs to the nation's producers (higher wages, higher energy prices, negative supply shocks in commodities markets, etc.) Causes both higher inflation and higher unemployment.
cross price elasticity of demand
A measure of the responsiveness of consumers of one good to changes in the price of a related good (either a complement or a substitute). Calculated as the percentage change in the quantity of Good A divided by the percentage change in the price of Good B. Can be negative (for complementary goods) or positive (for substitute goods).
crowding-out effect
The rise in interest rates and the resulting decrease in investment spending in the economy caused by increased borrowing in the loanable funds market by the government.
current account
Measures the balance of trade in goods and services and the flow of income between one nation and all other nations. It also records monetary gifts or grants that flow into our out of a country.
customs union
A free trade agreement under which member nations agree to remove all protectionist measures (tariffs, quotas, etc.) between member states, but maintain common external tariffs on imports from non-member states.
cyclical unemployment
Caused by a fall in aggregate demand in a nation, thus occurs when a nation is in a recession. Not included in the natural rate of unemployment.
deadweight loss
The loss of total societal welfare (consumer and produce surplus) that occurs when a market is producing at a level of output that is not socially optimal (where MSB=MSC). May arise from a market failure or from a government intervention in an already efficient market.
deflation
A decrease in the average price level of a nation's output over time.
deflationary gap
Also called the recessionary gap. The difference between the equilibrium level of national output in a nation and the full employment level of output when a nation is in a demand-deficient recession.
demand
A schedule or curve showing the quantities of a particular good demanded at a range of price in a particular period of time.
demand-pull inflation
An increase in the average price level resulting from an increase total spending in the economy (consumption, investment, government spending or net exports, which together make up aggregate demand in a nation).
demerit good
Goods that are considered to be undesirable for consumers and are over-provided by the market. Reasons for over-provision may be that the goods have negative externalities, or consumer ignorance about the harmful effects.
depreciation
A decrease in the value of one currency relative to another, resulting from a decrease in demand for or an increase in the supply of the currency on the forex market.
devaluation
When a government or a central bank intervenes in the market for its own currency to weaken it relative to another currency or currencies. May be achieved through measures such as reducing domestic interest rates, selling the currency on foreign exchange markets, or imposing foreign exchange controls that limit the amount of foreign investment in the country, reducing demand for the currency abroad.
discount rate
One of the three tools of monetary policy, it is the interest rate which the FED charges on the loans they make to commercial banks.
disequilibrium
When the price in a market is either too high or too low, so that the quantities supplied and demanded are not the same. If a price is higher than equilibrium, there will be a surplus in the market, meaning the quantity supplied will be greater than the quantity demanded. If a price is below equilibrium, there will be a shortage, meaning that the quantity demanded will be greater than the quantity supplied.
diversification
Producing a variety of different goods as a strategy to protect a nation from the unforeseen demand shocks which often disrupt the economic growth and development of certain developing nations which are over-dependent on the production of single commodity (e.g. oil, coffee, diamonds, bananas).
dumping
The practice of producers in one nation selling their output at a price lower than their costs of production in another nation. Considered a justification for protectionism by the World Trade Organization.
economic development
Improvements in standards of living of a nation measured by income, education and health. The Human Development Index is a widely used indicator of the levels of development of various nations.
economic growth
An increase in the output of goods and services in a nation between two periods of time.
elastic demand
When consumers are relatively responsive to price changes. A PED coefficient of more than one means that a particular change in the price of a good will be met by a proportionally larger change in the quantity demanded.
exchange rate
The price of one currency in terms expressed in terms of another currency, determined in the forex market.
export
The spending by foreigners on domestically produced goods and services. Counts as an injection into a nation's circular flow of income.
externality
When the production or consumption of a good creates either positive or negative effects on a third party not involved in the goods production or consumption. Can be negative (spillover costs) or positive (spillover benefits).
factors of production
Include the human and natural resource needed to produce any good or service: Land, labor, capital and entrepreneurship.
fair trade
A trade scheme which promotes better working and living conditions among the producers of primary commodities such as bananas and coffee in less developed countries. Attempts to assure that a larger percentage of the final sale price of such commodities makes it back to those who produced them.
financial account
Measures the flow of funds for investment in real assets (such as factories or office building) or financial assets (such as stocks and bonds) between a nation and the rest of the world.
fiscal policy
Changes in government spending and tax collections implemented by government with the aim of either increasing or decreasing aggregate demand to achieve the macroeconomic objectives of full employment and price level stability.
floating exchange rate
When a currency's price relative to other currencies is determined by the free interaction of supply and demand in international forex markets.
foreign direct investment
Investment in factors of production abroad by multi-national corporations.
foreign exchange market
The market in which international buyers and sellers exchange foreign currencies for one another to buy and sell goods, services, and assets from various countries. It is where a currency's exchange rate relative to other currencies is determined.
free trade
The exchange of goods and services between different countries undertaken without any government intervention.
free trade agreement
An agreement between two or more nations to reduce or eliminate barriers to trade across member states. Meant to achieve a more efficient allocation of resources between nations and a larger market for member nation's exports, as well as a larger variety of goods for domestic consumers to enjoy.
free trade area
An agreement between nations to reduce or remove tariffs and quotas on all goods traded between the member states. Nations can maintain their own external barriers to trade, thus this is a lower level of economic integration than a customs union, but it represents a higher level of integration than a preferential trade area.
frictional unemployment
When workers are voluntarily moving between jobs, or when recent college graduates are looking for their first job. Considered part of the natural rate of unemployment.
Gini coefficient
A numerical measure of the level of income inequality in a nation. Measures the ratio of the area between the line of equality (the 45 degree line) and a nation's Lorenz Curve to the total area below the line of equality. The closer the coefficient is to one, the more unequal a nation's income distribution. The closer to zero, the more equal the nation's income is distributed.
good
The physical output of a firm producing a product meant for sale and consumption in a product market. Contrast with services, which are non-physical products produced and sold by firms to consumers.
government expenditure
A component of a nation's GDP, consisting of all expenditures made by a nation's government in a year on public goods, services and infrastructure in a nation.
gross domestic product
The total market value of all final goods and services produced during a given time period within a country's borders. Equal to the total income of the nation's households or the total expenditures on the nation's output.
human development index
A measure of the standards of living, used to rank countries based on their level of human development. It takes into account three primary variables: the level of GDP per capita, (as an indication of income levels), literacy (as an indication of education levels), and life expectancy (as an indication of levels of health).
hyperinflation
A rapid and accelerating increase in the average price level in a nation, usually caused by monetary expansion (increases in the money supply without corresponding increases in national output).
import substitution
A strategy for economic growth and development focused on producing goods for the domestic market to replace the goods that consumers may have bought from foreign firms previously. Requires the use of protectionism to keep foreign imports out of the domestic market. Also known as "inward-oriented growth strategy".
import
Spending on goods and services produced in foreign nations. Counts as a leakage from a nation's circular flow of income.
income elasticity of demand
A measure of the responsiveness of consumers of a particular good to changes in their income. Calculated as the percentage change in the quantity of a good divided by the percentage change in consumers' income. Can be negative (inferior goods) or positive (normal goods).
inelastic demand
When consumers are relatively unresponsive to price changes. A PED coefficient of less than one means that a particular change in the price of a good will be met by a proportionally smaller change in the quantity demanded.
inferior good
A good that consumers demand less of as their incomes rise and more of as their incomes fall.
inflation
A rise in the average level of prices in the economy over time, measured by the percentage change in the Consumer Price Index (CPI).
inflationary gap
The difference between a nation's equilibrium level of output and its full employment level of output when the nation is over-heating (producing beyond its full employment level).
infrastructure
The physical assets of a nation which increase the efficiency with which the nation produces its output. Includes all the roads, electricity grids, water and sewage facilities, but also factories, airports, railways, tunnels, bridges schools and hospitals: anything that increases the productivity of labor in the nation.
interest
The payment for capital in the resource market. Firms pay interest on the money they borrow to acquire capital equipment (technology). Households receive interest for providing their savings to banks, who make the loans to the firms paying interest.
interest rate
The opportunity cost of money. Either the cost of borrowing money or the cost of spending money. What would be given up by not saving money.
Keynesian economic theory
The theory, developed by John Maynard Keynes during the Great Depression, that the government should take an active role in managing the level of aggregate demand in an economy. During recessions, government should run budget deficits (lower taxes and increase government spending) to stimulate AD and move the economy back towards full employment. During inflationary periods, the government should raise taxes and reduce government spending to bring AD back to its full employment level.
labor
The work undertaken by humans towards the production of goods and services.
land
Includes all natural resources needed to undertake production of goods or services: including soil, timber, minerals, fossil fuels, fresh water, livestock, fish, etc... "the gifts of nature".
law of demand
Ceteris paribus, there is an inverse relationship between the price of a good and the quantity demanded by consumers. At higher prices, less of a particular good tends to be demanded, while at lower prices, more of a good tends to be demanded. Can be explained by the income effect, the substitution effect and the law of diminishing marginal utility.
law of supply
Ceteris paribus, there exists a direct relationship between the price of a good and the quantity supplied by producers. Explains why the supply curve slopes upwards. As the price of good rises, sellers wish to supply greater quantities as the possibility for economic profits is greater. At lower prices, less output is produced since it is harder to earn profits. Firms are profit seekers.
long-run aggregate supply
A curve on the aggregate demand and aggregate supply model that is vertical at the nation's full employment level of output. Due to the fact that wages and prices are flexible in the long run, a nation's economy will always return to its full employment level of output following a change in aggregate demand, according to classical economic theory, at least.
Lorenz curve
A curve showing the distribution of income within a nation. Shows what percentage of the total income in a nation is earned by each quintile (e.g. the top 20% versus the middle or the bottom 20%).
managed exchange rate
When a government or central bank takes action to manage or fix the value of its currency relative to another currency on the forex market.
marginal private benefit
The benefits enjoyed by the individual consumers of a particular good. Does not take into account any external benefits or costs arising from a goods consumption.
marginal private cost
The private cost of an additional unit of output of a good experienced by an individual firm. Does takes into account only the explicit and implicit costs faced by the firm, and does not include external costs (the social or environmental costs which may arise from the production of a good).
marginal propensity to consume
The proportion of any change in income spent on domestically produced goods and services; equal to the change in consumption divided by the change in disposable income. One divided by 1-MPC determines the size of the Keynesian spending multiplier.
marginal propensity to save
The proportion of any change in income that is saved; equal to the change in savings divided by the change in disposable income. One divided by the MPS determines the size of the Keynesian spending multiplier.
marginal social benefit
The benefits experienced by the individual consumers of a particular good, plus or minus any social or environmental benefits or costs. MSB can be greater than marginal private benefit (MPB) if there are positive externalities of consumption (e.g. education) or less than MPB if there are negative externalities of consumption (e.g. smoking).
marginal social cost
The private costs faced by producers of a particular good plus any external costs placed on third parties, such as environmental or social costs, arising from a good's production.
market
A place where buyers and sellers meat to engage in mutual trade. Prices are set by the interaction of demand and supply in a market.
market failure
When the free market fails to achieve a socially optimal allocation of resources towards the production of a particular good or service.
merit good
A product which creates positive externalities, or spillover benefits, on a third party due to its production and/or consumption.
micro-credit
The extension of very small loans (a few hundred dollars or less, typically) to borrowers in less developed countries meant to give small entrepreneurs access to simple capital. Has proven a successful strategy for economic development.
monetarism
The macroeconomic view that the main cause of changes in aggregate output and the price level are fluctuations in the money supply.
monetary policy
The central bank's manipulation of the supply of money aimed at raising or lowering interest rates to stimulate or contract the level of aggregate demand to promote the macroeconomic objectives of price level stability and full employment.
money
Any object that can be used to facilitate the exchange of goods and services in a market.
multi-national corporation
A firm which operates in more than one country.
natural rate of unemployment
The level of unemployment that prevails in an economy that is producing at its full employment level of output. Includes structural and frictional unemployment.
net export
A component of aggregate demand. Equals the income earned from the sale of exports to the rest of the world minus expenditures by domestic consumers on imports.
non-governmental organization
An organization created for a set of specific public action purposes including development. Could be focused on environmental, education, social justice, health, human rights and other issues that affect the level of human development in a poor country.
normal good
A good that consumers demand more of as their incomes rise and less of as their incomes fall.
opportunity cost
What must be given up to have anything else. Not necessarily monetary costs, rather include what you could do with the resources you use to undertake any activity or exchange.
perfectly elastic demand
When any change in the price of a good leads to a nearly infinite change in the quantity consumers demand. For example if the price rises at all, no one will wish to buy the good. If the price decreases at all, every consumer will wish to buy the good. Demand for a perfect competitor's output is perfectly elastic, due to the countless perfect substitutes available to consumers.
perfectly inelastic demand
When the quantity demanded for a good does not change even as the price rises or falls.
poverty cycle
When a poor country remains poor due to a particular obstacle preventing it from achieving economic growth and development, such as conflict, geography, disease or corruption.
preferential trade agreement
A free trade agreement in which member states agree to remove protectionist measures on certain goods or services traded between them. The lowest level of economic integration, since only particular goods are included in the agreement.
price
This is the amount paid for a good determined by the supply and demand for the good in the market.
price ceiling
A maximum price set by the government, usually below the equilibrium price, meant to lower the price consumers have to pay for a product. An effective price ceiling leads to a disequilibrium in the market in which the quantity demanded is greater than the quantity supplied (shortage).
price elasticity of demand
A measure of the responsiveness of consumers to a change in the price of a particular good. Measures the percent change in quantity divided by the percentage change in the price of a good.
price elasticity of supply
A measure of the responsiveness of producers to changes in the price of a good. Calculated as the percentage change in the quantity supplied divided by the percentage change in the price.
price floor
A minimum price set by the government, usually above the equilibrium price, meant to increase the price that producers receive for their output. An effective price floor leads to a disequilibrium in the market in which the quantity supplied is greater than the quantity demanded (surplus).
price level
A macroeconomic term referring to the average price of the goods produced by the various industries present in a nation's economy. Found on the vertical axis of an aggregate demand / aggregate supply diagram.
private sector
Refers to the activities undertaken by the private households and firms in an economy. "Private sector spending" includes household consumption and investment by private, non-government-owned firms.
producer surplus
The additional benefit enjoyed by producers who would have been willing to sell their product for less than the market price. Graphically it is the area of the triangle below the equilibrium price and above the supply curve, out to the equilibrium quantity.
production possibilities curve
A graph that shows the various combinations of output that the economy can possibly produce given the available factors of production and the available production technology.
productive efficiency
When a good is produces in the least cost manner, productive efficiency is achieved. This means that firms producing the good are achieving the lowest possible average production cost; in other words, they are producing at the lowest point on their average total cost curve, where marginal cost intersects the ATC. Among the four market structures (perfect competition, monopolistic competition, oligopoly and monopoly), only perfectly competitive firms will achieve productive efficiency in the long-run, since the price in the market will always be competed down to the firms' minimum ATC.
profit
The payment to the entrepreneur in the resource market.
protectionism
The use of tariffs, quotas or subsidies to give domestic producers a competitive advantage over foreign producers. Meant to protect domestic production and employment from foreign competition.
public good
Goods or services which are non-excludable by the producers and non-rivalrous in consumption. Because of these characteristics, private sector firms have little or no incentive to produce them, since they would be impossible to sell. Therefore, government must provide public goods. Examples include street lamps, sidewalks and national defense.
public sector
Refers to the activities undertaken by the government or the state. The investment of this generally refers to government spending on infrastructure.
quota
A physical limit on the quantity of a good produced in a foreign country allowed to be imported. Meant to restrict imports, allowing domestic producers to sell a greater quantity on the domestic market.
real gross domestic product
Measures the value of a nation's output in a period of time adjusted for any inflation or deflation the economy has experienced. Equals the nominal GDP divided by the GDP deflator price index.
recession
A decrease in the total output of goods and services in a nation between two periods of time. Could be caused by a decrease in aggregate demand or in aggregate supply.
recessionary gap
The difference between an economy's equilibrium level of output and its full employment level of output when an economy is in recession.
relative poverty
The state of earning an income that puts one in the lowest income level within his or her own country. This exists everywhere, since within even the richest nations a proportion of the population earns relatively less than the top income earners.
rent
The price of land resources. Rent must be paid by producers, either as an explicit cost or as an opportunity cost for those who own the land resources employed in production.
revaluation
When a government or central bank intevenes in the market for its own currency on foreign exchange market to raise its value relative to another currency or currencies. Measures may include raising domestic interest rates, purchasing the currency using foreign exchange reserves, or restricting the outflow of capital for foreign investment (exchange controls).
scarcity
When something is both desired and limited in supply. All resources (land, labor and capital) are limited in supply, yet desired for their use in the production of goods and services.
seasonal unemployment
A type of frictional unemployment in which a worker is in between jobs that are only available during certain seasons. For example a ski instructor who guides rafting trips in the summer will be seasonally unemployed in the spring and fall.
service
The non-physical output of firms meant for consumption in a product market. These are non-tangible, such as taxi rides, accounting, doctor visits, teaching, and other products that can be bought and sold, but not physically consumed.
short run aggregate supply
An upward sloping curve, relatively flat below the full employment level of output, and relatively steep beyond the full employment level, showing the amount of output a nation's producers will supply at a range of price levels in a particular period of time. The curve's shape reflects the fact that output cannot grow beyond the full employment level due to the limited factors of production available in the economy, but when aggregate demand falls output will decline due to the inflexibility of wages in the short run.
shortage
When the quantity demanded for a particular good is greater than the quantity supplied. Also called "excess demand". Occurs when the price is below the equilibrium level, for example, when a government imposes a price ceiling in a market.
specialization
The practice of allocating an individual's, an organization's or a nation's resources towards the production of a good or a category of goods for which it has a relatively low opportunity cost. Improves the overall allocation of resources and allows individuals and, with trade, allows individuals or nations to consume beyond what they would be able to produce on their own.
speculation
The buying and selling of currencies or other assets based on the expectation of future changes in exchange rates or prices. It is a major determinant of the exchange rate of the world's currencies.
stagflation
A macroeconomic situation in which both inflation and unemployment increase. Caused by a negative supply shock.
sticky-wage
The short run aggregate supply curve is sometimes referred to as the "inflexible wage and price model", because workers' wage demands take time to adjust to changes in the overall price level; therefore, in the short run an economy may produce well below or beyond its full employment level of output. Explains why short run aggregate supply is horizontal below full employment and nearly vertical beyond full employment.
structural unemployment
Caused by changes in the structure of demand for goods and in technology; workers who are unemployed because their skills do not match what is in demand by producers in the economy.
subsidy
Payments made from the government to individuals or firms for the production or consumption of particular goods or services. It reduces the cost of production or increases the benefit of consumption, and therefore lead to a greater equilibrium quantity in the market for the subsidized good.
substitute good
When a good can be used instead of another good, the two goods are substitutes. The demand for one good is directly related to the price of its substitutes.
supply
A schedule or curve showing the direct relationship between the quantity of output firms produce in a particular period of time and the various prices of the good.
supply shock
Anything that leads to a sudden, unexpected change in aggregate supply. Can be negative (decreases AS) or positive (increases AS). May include a change in energy prices, wages, business taxes, or may result from a natural disaster or a new discovery of important resources.
surplus
When the quantity supplied of a good is greater than the quantity demanded. Also called "excess supply". Will occur if the price in a market is greater than the equilibrium price, for example, due to a government price floor.
sustainability
The ability to endure over time. Sustainable growth requires that resources are used at a rate at which they are able to replenish themselves and the environment is not despoiled in the process of production.
tax
A payment made by an individual or a firm to the government, usually levied on income, property or the consumption of goods and services. They are a leakage from the circular flow of income, but they provide government with the money they use to provide government services and public goods.
tax incidence
When an indirect tax is placed on a particular good or group of goods, the incidence, or burden, of the tax is shared by producers and consumers. Buyers will pay a higher price, thus share some of the burden of the tax. But once the tax has been paid to the government, producers end up keeping a lower price, meaning they also share some of the tax burden. The amount of a tax on a particular good paid by consumers is the consumer tax incidence; the amount paid by producers is the producer tax incidence.
international monetary fund
An institution established to assure exchange rate stability and to assist in financial crises, to facilitate international trade and to promote high employment and economic growth in less developed countries.
total revenue
What a firm earns from the sale of its output. Equals the price of the output multiplied by the quantity sold.
trade deficit
When a country's total spending on imported goods and services exceeds its total revenues from the sale of exports to the rest of the world. Another term for current account deficit in the balance of payments.
trade surplus
When a country's sale of exports exceeds its spending on imports. Another term for a current account surplus in the balance of payments.
tradeable permit
A market-based solution to correcting negative production externalities. The government issues or sells permits allowing firms to emit a pre-determined quantity of pollution (such as CO2) into the environment. If a producer wishes to exceed the amount they are permitted, they must purchase additional permits from other firms. Firms that reduce their emissions may sell permits they no longer require, adding to the firm's revenues. Dirty firms end up paying more to produce, while greener firms earn greater revenues from selling permits they no longer require; thereby such a scheme creates a strong incentive to reduce pollution.
unemployment
The state of an individual who is of working age, actively seeking work, but unable to find a job.
unemployment rate
The percentage of the labor force that is actively seeking employment but unable to find a job. Equals the number of unemployed divided by the total labor force times 100.
unit elastic demand
When a particular change in the price of a good is met by a proportionally identical change in the quantity demanded. A PED coefficient of 1 indicates unit elastic demand.
wage
The payment to labor in the resource market. They are the price of labor.
wealth
An important determinant of consumption. Refers to the total value of a household's assets minus all its liabilities.
world bank
An international agency which makes soft loans to less economically developed countries, mostly for infrastructure projects or other investments which improve the physical or the human capital of the developing country.
world trade organization
An organization aimed at liberalizing trade by facilitating the reduction or elimination of trade barriers between member states.
tariff
Taxes placed on goods imported from other countries. Meant to protect domestic producers from foreign competition.
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