39 of the Economics glossary’s terms, each with the part of the syllabus where you first meet it.
A transaction recorded with a minus sign in the balance of payments because money leaves the country, such as spending on imports or investment abroad by residents.
The cancellation, reduction or rescheduling of a country's debts by its creditors, lowering the amount owed or the payments due so that resources can be used for development.
The payments of interest (and repayments of principal) that a government must make on its outstanding debt in a period.
A situation in which real GDP grows while resource use or pollution, such as carbon dioxide emissions, stays the same or falls.
An option that applies automatically unless a person actively chooses a different one, for example being enrolled in a pension scheme unless the worker opts out.
A sustained fall in the general (average) level of prices in an economy over time, so that the inflation rate is negative.
The situation where equilibrium real GDP is below the full employment level of output, so resources are unemployed and there is cyclical unemployment; also called a recessionary gap.
The quantities of a good or service that consumers are willing and able to buy at each possible price during a given time period, ceteris paribus.
A graph showing the quantity demanded of a good at each possible price, ceteris paribus; it normally slopes downwards from left to right.
The quantity of money (cash and bank deposits) that households and firms wish to hold at each interest rate; it is higher at lower interest rates because the opportunity cost of holding money is lower.
A table listing the quantity of a good demanded at each of a range of prices, for one consumer or for the whole market, ceteris paribus.
A sudden, unexpected change in one or more components of aggregate demand that shifts the AD curve, such as a collapse in exports or in consumer confidence.
Inflation caused by increases in aggregate demand, when total spending grows faster than the economy’s capacity to produce, especially near full employment.
A good or service that is more harmful to people than they realise, such as cigarettes or alcohol, so it is overconsumed in a free market; it often has negative consumption externalities.
A government-backed guarantee that bank depositors will be repaid up to a set limit if their bank fails, which prevents bank runs but can create moral hazard.
A fall in the value of a currency in a floating exchange rate system, caused by market forces, so that one unit buys less of another currency.
The removal or reduction of government rules that restrict how firms operate or who may enter a market, intended to increase competition and efficiency.
Demand for a factor of production that comes from the demand for the goods and services it helps to produce, such as the demand for builders arising from the demand for new homes.
The factors that decide how price elastic demand for a good is: the number and closeness of substitutes, the degree of necessity, the proportion of income spent on it, and time.
A decision by the government or central bank to lower the value of its currency in a fixed (or managed) exchange rate system.
Longer-term assistance aimed at raising living standards and productive capacity, for example by funding schools, clinics, roads, water systems, agricultural research or government reforms.
The supply of goods or services by the government itself, financed from tax revenue and usually provided free or at a low price, such as state schools and public hospitals.
A tax paid directly to the government by the person or firm on whom it is levied, on their income, profits or wealth, such as personal income tax, corporate income tax or wealth tax.
Deliberate changes in government spending or tax rates, decided by the government, to influence aggregate demand.
Treating people less favourably because of a characteristic unrelated to their productivity, such as gender, race, ethnicity, religion, age or disability, for example in hiring, pay, promotion or access to credit.
Rises in long-run average cost that occur when a firm grows beyond a certain size, for example because of problems with coordination, communication and motivation.
A situation in a market where quantity demanded and quantity supplied are not equal at the current price, so there is excess demand or excess supply and pressure for the price to change.
A fall in the rate of inflation, so that the general price level continues to rise but more slowly than before.
Household income after direct taxes have been paid and transfer payments received; the income households have available to spend or save.
The way a country’s total income is shared between individuals or households over a period, usually a year.
The way the total stock of assets in an economy, net of debts, is shared between individuals or households at a point in time.
The widening of the range of goods and services an economy produces and exports, so that it relies less on a small number of products, especially primary commodities.
The splitting of a production process into many small tasks, each done by a different worker who specialises in it, which raises output per worker.
The equilibrium price in a country's market without international trade, set where domestic demand equals domestic supply.
A strategy that gives a player the best payoff whatever strategy the other player chooses.
The error of counting the value of an intermediate good more than once, both on its own and again as part of the price of the final good.
Kate Raworth’s model in which the goal of an economy is to meet everyone’s basic needs (the social foundation) without overshooting the planet’s environmental limits (the ecological ceiling).
The sale of a good in a foreign market at a price below the price charged in the producer’s home market or below its cost of production.
The decline of other export and import-competing industries, especially manufacturing, after a natural resource export boom raises the exchange rate and draws labour and capital into the resource sector.