When a firm's average revenue is greater than its average costs.

The ability to produce the same quantity of a good or service using fewer resources per unit of time.

The inability to afford the basic goods and services required to meet essential needs, when measured in relation to a fixed poverty line that indicates the minimum income required to cover basic necessities.

Bureaucratic rules and regulations imposed by governments to restrict imports and protect domestic industries.

When one of the sides has more knowledge about the quality of the product sold than the other.

The total quantity of real output that all buyers in an economy (consumers, businesses, the government, and foreigners) are willing to purchase over a specific time period, at all possible price levels, ceteris paribus.

The total output produced in an economy at all possible price levels, over a specific time period, ceteris paribus.

Allocative efficiency refers to the situation where the market produces the socially desirable quantity of output.

State of the economy in which the combination and quantity of goods and services produced is aligned with the preferences of consumers and producers, maximising social surplus.

Appreciation is the increase in the value of a currency.

Refers to situation where buyers and sellers don't have the same access to information.

Factors without government interaction which automatically reduce the short-term business cycle fluctuations.

The average total proportion of income paid as tax.

A statement or record of a country's economic transactions with the all other countries over a specific time period (often a year).

A relatively recent field of economics founded on the notion that human behaviour is significantly more complex than the traditional assumptions of rational consumer choice.

Refers to a signed certificate, which represents a loan given by the bond holder to the borrower in exchange for regular interest payments and the promise to repay the full amount at a set future date.

Fluctuations in the growth of real output, characterised by alternating phases of expansion (rising real output) and contraction (falling real output).

Human-made factors of production used to produce goods and services.

The capital account is the sum of the balance of capital transfers and transactions in non-produced, non financial assets.

The large-scale and rapid movement of financial assets or capital from a country to foreign markets, often due to economic instability, political uncertainty, or fear of currency depreciation.

A carbon tax is a tax which is imposed on per unit of carbon emitted.

A Latin expression that indicates all other variables besides those being considered are assumed to be unchanging.

The dynamic nature of economic activity, where prices, employment, output, and policies evolve over time in response to internal and external influences.

The act of selecting among alternatives because of the scarcity of resources.

The way in which options are showcased to decision-makers where there is emphasis on the design and environment to influence decisions.

An income flow in an economy where the value of the output produced is equivalent the total income earned from its production, which is also equivalent to the expenditures spent on purchasing that output.

A model illustrating the flow of resources from households to firms, the movement of goods and services from firms to households, and the associated monetary flows, including household income generated from selling resources and firms' revenues from selling their products.

The situation where a common pool resources are given to the control of individuals for them to manage it in a sustainable manner.

A form of trading bloc that builds on a customs union by allowing the free movement of goods, services, and factors of production (labour, capital, etc.) among member countries.

Natural resources which are available for use for everyone, but are susceptible to overuse and depletion.

A country having lower opportunity costs in the production of a good compared to another country.

Goods or services in Competitive Supply are alternate use of resources of each other where they compete for the use of the same resources.

Goods that tend to be used together.

A single measure that combines multiple individual indicators into one index to provide an overall assessment.

Concentration ratio measures the market share controlled by the larger firms in the market.

A measure of the cost of living carried out by comparing the value of a basket of goods and services in a given year to a base year.

The difference between the highest price consumers are willing and able to pay for a good or service and the actual price they end up paying.

Fiscal policy aimed at reducing aggregate demand by decreasing government spending or increasing taxes.

A type of inflation caused by rising production costs, such as higher wages or input prices, which reduce aggregate supply and push the price level up.

determined by international agencies, who rank countries with respect to how probable the country is to repay their loans completely and on time.

The current account is the sum of the balance of trade in goods and services, income and current transfers.

A type of trading bloc that fits all the criteria of being an FTA but also adopts a common policy towards non-member countries.

Cyclical unemployment occurs during economic downturns when demand for goods and services falls, leading to job losses.

Partial or total cancellation, restructuring, or reduction of a country's debt obligations to help alleviate financial burdens and support economic recovery.

A sustained decrease in the general price level of goods and services in an economy over time, typically indicated by a negative inflation rate.

Various quantities of a good or service that consumers are willing and able to buy at different possible prices during a particular time period, ceteris paribus.

A type of inflation caused by an increase in aggregate demand that exceeds aggregate supply at the full employment level.

Goods that are not socially desirable but are over provided by the market.

Depreciation is the decrease in the value of a currency.

Factors that shift the aggregate demand curve by affecting its components: consumption (C), investment (I), government spending (G), and net exports (X - M).

Factors that shift the SRAS curve.

When the government directly delivers the goods/services to the public.

Tax paid to the government directly by the taxpayer (individual).

A slowdown in the rate of inflation, meaning prices are still rising but at a slower pace compared to previous periods.

The process of expanding the range of products, services, or markets to reduce risk and enhance economic stability.

The sale of goods and services in international markets at a price that is lower than the cost of production

Structural challenges that prevent countries from achieving sustainable economic growth and development.

The process of increasing real per capita income while improving living standards and reducing poverty within an economy as whole.

Shift of the economy from fewer to larger number of income sources.

An increase in a country's real output (real GDP) over a period time.

The degree of differences between an economy's individuals in their ability to satisfy their needs and wants due to monetary constraints.

Cooperation and coordination between countries and their economic policies, to make them more economically interconnected.

The level of prosperity, economic satisfaction, and standard of living experienced by members of an economy.

The study of choices leading to the best possible use of scarce resources in order to best satisfy unlimited human needs and wants.

Reductions in average production costs that arise when a firm increases its output by scaling up all its inputs in the long run.

Using scarce resources in the best possible way to avoid welfare loss.

The unique human skills held by some individuals, including the ability to innovate, take business risks, and pursue new opportunities for running a business.

The even distribution of resources, opportunities, and outcomes among individuals or groups within a society

The condition of being fair and just.

Refers to the concept where there is a fair resource distribution.

An exchange rate is the value of one currency in terms of another currency.

Fiscal policy aimed at increasing aggregate demand by increasing government spending and/or reducing (business and personal) taxes.

Policies that aim to reduce overall spending in the economy, including spending on imports.

Policies that aim to switch spending from imports to domestic goods and services.

The spillover effects on third parties, due to actions of consumer or producers.

All resources or inputs used to produce goods and services.

The financial account is the sum of foreign direct investment (FDI), portfolio investment, reserve assets and official borrowing.

Investments in financial instruments, or the funds used to purchase financial instruments. A capital factor of production.

Refers to the influence of government spending and taxation to impact the aggregate demand.

System where the central bank maintains the currency’s value at a predetermined level rather than letting market forces decide it.

A floating exchange rate is a system in which the value of a currency is determined by supply and demand, without government intervention.

Provision of financial assistance, goods, and services to developing countries, with the primary purpose of improving their economic, social, and political conditions.

An FDI is an investment by a foreigner into another country, where the investor buys at least 10% of a business.

An absence of government intervention in international trade, resulting in no imposing restrictions of any kind on imports and exports.

The most common type of economic integration where a group of countries agree to gradually remove trade restrictions.

Frictional unemployment occurs when people are temporarily between jobs or entering the workforce for the first time.

A numerical representation of the information given by the Lorenz Curve, measuring income or wealth inequality on an index from 0 (perfect equality) to 1 (perfect inequality).

When a government alters the resource allocation that markets would have achieved working freely on their own.

The market value of all final goods and services produced in an economy over a period of time (usually a year), regardless of who owns the factors of production.

The total income earned by an economy's residents over a specific time period, equal to the market value of all final goods and services produced by the factors of production supplied by the economy's residents, regardless of the location of the factors of production.

An alternative to traditional national income statistics that measures economic well-being using numerous quality of life dimensions in addition to real GDP per capita.

An alternative to traditional national income statistics that accounts for environmental sustainability and inequalities as a measure of economic well-being.

Skills, abilities, good health, and knowledge utilized by people to increase their productivity.

Provision of resources and emergency assistance to people affected by natural disasters, conflicts, or crises, with the immediate aim of saving lives, alleviating suffering, and maintaining human dignity.

The ability of prices, and changes in prices, to provide information to consumers and producers that encourages them to act in their own best interest.

A measure of the responsiveness of demand for changes in income.

The monetary funds households earn in return for their factors of production: rent from land, wages for labour, interest from investments, and profits from entrepreneurship.

Taxes paid by households on their incomes.

Indicator is a metric to measure the level of a concept.

Taxes imposed on goods and services, paid to the government by sellers but ultimately borne by consumers.

Taxes levied on spending on goods and services. They are called indirect because while consumers contribute to part or all of the tax, it is the suppliers (firms) who collect and transfer these taxes to the government authorities (consumers pay the taxes indirectly).

Differences in life opportunities due to factors beyond an individual’s control.

A new domestic industry that has not had the time to achieve production efficiencies and hence, not established itself yet.

A good whose demand decreases as consumer income increases.

A strategy where central banks set a specific inflation rate as their primary goal and adjust monetary policies respectively to meet the goal.

A situation where the actual real output of an economy is above its full-employment level of output, resulting in unemployment being lower than the natural rate.

Part of the economy that lies outside the formal economy, and involves economic activities that are unregistered and legally unregulated.

The addition of funds into the income flow through investment, government spending, or exports.

The formal and informal rules, laws, and systems that structure economic, political, and social interactions, influencing decision-making, resource allocation, and economic development.

Refers to the situation where economic entities depend on each other to achieve their goals.

The concept that economic decision-makers rely on and interact with one another, because no one can be entirely self-sufficient.

Interest stated as a percentage. It represents the proportion of the amount of money borrowed charged as interest.

When countries work together to solve global problems and achieve shared goals through agreements and joint actions.

The exchange of goods and services between two or more countries.

The exchange (exports and imports) of goods and services between countries.

Typically involving government action, it occurs when the government interacts with the workings of markets.

Goods or Services in Joint Supply are consequences of each other and derived from a single process or product.

The Keynesian multiplier is the proportional increase in real GDP that results from an initial injection into the economy.

The Keynesian multiplier is the proportional increase in real GDP that results from an initial injection into the economy.

All the physical work and mental skills that humans put into the production of goods and services.

All natural resources on Earth, including farmland and non-farmland. All the natural resources found below and above the ground.

As additional units of a variable input (e.g., labour) are added to fixed inputs (e.g., land), the marginal product increases by less and less each time, eventually decreasing.

As more of a good is consumed, the additional satisfaction (marginal utility) gained from each extra unit decreases, and so consumers will only buy more of the good if its price falls.

There is a direct, positive relationship between price and quantity supplied.

The removal of funds from the income flow, represented by savings, taxes, or imports.

A graphical representation of the income inequality within an economy.

Goods and services that are not essential for one's living and often bought for leisure purposes.

The point where aggregate demand intersects aggregate supply, establishing the price level and the real output (real GDP) of an economy.

Key goals of governments in achieving economic stability include sustainable growth, low inflation, low unemployment, balanced trade, and income equality.

The branch of economics that analyzes the economy as a whole by using aggregates.

System where the exchange rate is mainly determined by market forces, but the central bank occasionally intervenes to keep it close to a desired level.

Goods or services produced by the workings of labour, capital and raw materials.

The benefit gained from consuming an additional unit of a good or service

The cost of producing an additional unit of output

The additional output that results from adding one extra unit of a variable input (e.g., labour).

The percentage of tax paid on the next dollar earned.

The satisfaction obtained from consuming one more unit of a good or service.

Any arrangement that connects buyers and sellers, enabling them to carry out an exchange.

When quantity demanded is equal to quantity supplied, and there is no tendency for the price to change.

Occurs when firms fail to efficiently allocate the resources within an economy.

The degree to which a firm in a market is able to control its output price.

The percentage of total sales in the market, which a firm is part of, that the firm generates.

The sum of the supplies of all individual firms within a market for the good.

A condition which determines the level of success a depreciation or devaluation of a currency rate of exchange will have on improving a current account deficit in the balance of payments.

Goods that are desirable by society but are under provided by the market.

The branch of economics that studies the behaviour of consumers and firms in making decision regarding the allocation of resources.

Monetary policy refers to the adjustments of the interest rates and the availability of money in the economy set by the central bank.

A common market between countries who also share a common currency and a common central bank.

The money multiplier is a concept that quantifies the total amount of money created in the economy from an initial deposit.

A market structure with one single dominant firm that has substantial control over output prices. The firm sells a unique product and is protected by high barriers to entry.

A situation where one part takes a risk but is not responsible for covering all of the costs because they are being covered by the other party.

A form of international aid where multiple countries or international organizations work together to provide financial, technical, and humanitarian support to developing nations.

An MNC is a firm that undertakes foreign direct investment (FDI).

Nash equilibrium refers to a situation where none of the players can improve their position by making another choice.

The total income of an economy, composed of the sum of wages, interest, rent and profit.

The measurement of an economy's national income and output, as well as other measures of economic activity.

The total value of the final goods and services produced by an economy, often measured by real GDP. It is also known as aggregate output.

A single firm that can produce for the entire market at a lower average cost than if the market was shared by multiple smaller firms.

A monopoly that can serve the entire market at a lower average cost than if the market were divided among smaller firms. This occurs when the total market demand is small enough for the monopoly to benefit from economies of scale, keeping its long-run average costs falling.

The level of unemployment that persists even when the economy is operating at full-employment. It consists of the sum of structural, frictional, and seasonal unemployment.

Goods or services crucial for ones' life and extremely difficult to live without.

Negative Production Externalities are spillover costs passed on to third parties from the production of a good, which are not reflected in the market price.

The market interest rate before inflation is taken into account.

Nominal interest rate is not adjusted for inflation.

Factors, other than price, that can affect the demand of consumers and shift the demand curve.

Factors, other than price, that can affect the supply of a firm (or multiple firms) and shift (change position) the supply curve.

A good whose demand increases as consumer income increases.

When a firm’s total revenue exactly covers total costs. It is the minimum level of profit that the firm needs to earn in order to remain in the market in long term.

When a firm’s total revenue exactly covers total costs. It is the minimum level of profit that the firm needs to earn in order to remain in the market in long term.

Way of thinking in economics that focuses on opinions and value judgments about what should or ought to happen in economic systems.

A method used to influence the decision of a consumer in a desirable way, without offering any financial incentives or imposing any legal regulations over them.

An alternative to traditional national income statistics that evaluates economic well-being across multiple dimensions, incorporating aspects that account for the quality of life.

A market structure dominated by a few large firms.

The value of the next best option that must be forgone or sacrificed in order to acquire something else.

Where the value of a currency is kept higher than its equilibrium level by government or central bank intervention.

Pegging currency means the central bank sets and maintains the value of the domestic currency relative to another currency.

A market structure with a large number of small firms that have no control over output prices. All firms sell an undifferentiated product and there are no barriers to entry.

Capital factors of production used to produce more goods and services in the future.

Form of tax imposed on activities that generate negative externalities.

A financial investment by a foreigner, such as the purchase of stocks.

Occurs when the consumption of a good/service leaves positive spillover effects on third-parties.

Way of thinking in economics that focuses on describing, explaining, and predicting economic events.

When the production of a good/service has a positive spillover effects on third parties.

The inability to meet standard consumption needs. These standards can be absolute or relative.

A self-reinforcing cycle where low income leads to limited access to resources, which in turn prevents individuals or communities from improving their economic situation.

An agreement between countries to reduce the amount of trade restrictions imposed between them on specific products.

A maximum price, below the equilibrium price, set by the government for a particular good or service.

Refers to the setting of a maximal/minimal price above/below the equilibrium price by the government.

A measure of the responsiveness of quantity demanded when there is a price change.

A measure of the responsiveness of quantity supplied when there is a change in price.

A minimum price set by the government for a good, above the equilibrium price.

Goods and services that directly come from natural resources or using the factor of production called land.

The sector of the economy that produces primary commodities, which are goods arising from the factor of production land.

The difference between the price sellers receive and the lowest price that they are willing and able to accept.

Curve that illustrates all possible combinations of two goods that an economy can produce at maximum output when using all available resources and current technology efficiently.

The money left for a firm after the total costs have been subtracted from total revenue.

Payments, per unit time, made to the owners of entrepreneurship (one of the factors of production)

A good that is both non-rivalrous and non-excludable at the same time.

The ability of a given amount of money to buy goods and services, which depends on the prices of those goods and services. A fixed amount of money with higher purchasing power can buy more goods and services than the same amount with lower purchasing power.

Special exchange rates designed that equal the purchasing power of different currencies to that of 1 US dollar.

A monetary policy where the central bank purchases financial assets from the market to increase the money supply.

Limit to the quantity of a certain good that can be imported over a particular period of time

Economic theory where consumers make choices in their best self-interest trying to maximize utility.

The act of aiming to maximise profits. The goal of firms, according to the standard theory of the firm.

The controlled distribution of the scarce resources, goods, and services.

Method to divide and apportion goods or services amongst consumers

The interest rate which has been adjusted for inflation.

Real interest rate is corrected for inflation.

Sustained falling real output in an economy (a contraction in the business cycle) lasting two consecutive quarters (6 months).

When the actual real output of an economy is below its full-employment level of output, resulting in unemployment being higher than the natural rate.

Establishment of requirements and standards to regulate behaviour.

The inability to afford the standard of goods and services considered typical in their society.

Remittances refer to situations where family members or friends send money from abroad.

Assigning available resources or factors of production to particular uses selected from various possible options.

The money earned by a firm, over a period of time, from selling goods and services.

The risk of not being able to pay accumulating debt back when country is borrowing for long periods of time.

The idea that available resources (land, labour, capital, entrepreneurship) are limited and unable to satisfy unlimited human needs and wants.

A situation when the party with the less information is trying to get more information about the good/service.

Seasonal unemployment arises when jobs are only available during certain times of the year.

The total output produced in an economy at all possible price levels, when the costs of factors of production are fixed, ceteris paribus.

The excess of quantity demanded over quantity supplied.

Signaling is a method used by the party with more information, to convince the party with less information that the good/service included in the transaction is of good quality.

The capacity of prices, and changes in prices, to convey information to consumers and producers about the existence of shortages or surpluses in markets, achieving an efficient allocation of resources.

Any academic field that examines human society and social relationships, focusing on uncovering general principles that explain how societies operate and are structured.

The sum of consumer surplus and producer surplus. Maximised in the free market, when the market operates at its equilibrium point.

The level of production that achieves allocative efficiency, where the allocation of resources results in the most beneficial outcome for society as a whole, maximising social welfare.

Speculation refers to the buying and selling of currencies to profit from fluctuations in exchange rates.

Structural unemployment happens when there is a mismatch between workers’ skills and available jobs.

Monetary help (direct or indirect payment) offered by the government to firms (sometimes households) to aid in lowering costs of production.

Goods that satisfy a similar need.

The quantity of a good or service a firm (or multiple firms) is willing and able to produce for a given price in a given time period, ceteris paribus.

Government policies aimed at increasing the productive capacity of the economy and improving market efficiency.

The extra supply that results when quantity supplied is greater than quantity demanded.

Using resources in a way that meets current needs without compromising the ability of future generations to meet their own needs.

Preserving the capacity of the environment and the economy to continue to produce and satisfy the needs and wants of future generations.

The use of a resource at a rate which allows it to naturally regenerate, so it does not degrade or deplete.

Refers to the ability of the current generation to meet their needs without compromising the ability of future generations to meet theirs.

Also known as 'customs duties', they are taxes imposed on imported goods.

Mandatory payments made by households and firms, collected by governments.

When a person enjoys a benefit of a good/service without paying for it.

The law of demand states that, as the price of a good increases, the quantity demanded decreases, ceteris paribus.

A situation where individuals, acting in their own self-interest, overuse and degrade a shared resource, causing long-term harm to the resource and society.

Amount of money received by firms when they sell a good (or service).

A legal cap set by the government, limiting the amount of emissions that can be emitted. Each firm are provided a set of permits, which can be exchanged with other firms.

Scenario where lower cost imports are replaced with higher cost imports or domestic production.

scenario where higher cost imports from a member country replace lower cost imports due to the formation of the trading bloc.

To free up international trade by removing trade barriers.

When the government intervenes in international trade by imposing restrictions to reduce free imports.

Group of countries encouraging free trade and economic integration through the reduction of trade barriers between them.

Transfer payments are redistributions of income by the government to individuals or households without any exchange of goods or services.

Situation where the currency’s value is kept lower than its equilibrium level, making exports cheaper and imports more expensive.

When people of working age (16-65) who are actively seeking and able to work, but are not employed.

The number of unemployed people expressed as a percentage of the labor force.

Universal Basic Income (UBI) is a policy where the government provides a fixed amount of money to every citizen, regardless of their income or employment status.

The satisfaction obtained from consuming a good or service.

Utility is the satisfaction that a consumer receives by consuming a good/service.

The total value of someone's owned assets (savings, stocks, bonds, land, properties...) minus their debts.

Refers to the unequal levels of wealth that individuals own.

The reduction in social surplus that occurs when marginal social benefits (MSB) are not equal to marginal social costs (MSC), typically as a result of market failure.

International organisation who is in charge of regulating and facilitating international trade.