48 of the Economics glossary’s terms, each with the part of the syllabus where you first meet it.
A business objective in which a firm aims for a satisfactory level of profit, or a satisfactory outcome across several goals, rather than the maximum possible profit.
The part of income that households do not spend on consumption; it is a leakage from the circular flow of income.
The classical idea, named after Jean-Baptiste Say, that supply creates its own demand: the income earned from producing goods is spent on other goods, so there can be no general shortage of demand.
The basic economic problem that resources are limited while human needs and wants are unlimited, so not all needs and wants can be satisfied.
Action taken by the less-informed party to find out the hidden information of the other party, for example a medical check before life insurance or a test before hiring.
Unemployment that occurs because demand for labour in some industries, such as tourism, agriculture and construction, changes with the seasons of the year.
The part of the economy that processes raw materials into manufactured goods, including manufacturing and construction.
A change in the shares of output and employment produced by the primary, secondary and tertiary sectors, usually from primary to secondary and then tertiary as incomes rise.
A change in the quantity demanded at every price, caused by a change in a non-price determinant of demand; an increase shifts the curve right and a decrease shifts it left.
A change in the quantity supplied at every price, caused by a change in a non-price determinant of supply; an increase shifts the curve right and a decrease shifts it left.
The period of time in which at least one factor of production, usually capital such as buildings and machinery, is fixed in quantity.
The total output firms plan to produce at each average price level in the period when the prices of factors of production, especially money wages, stay fixed; it slopes upwards.
The price equal to the minimum of average variable cost, below which a firm minimises its losses in the short run by stopping production.
Action taken by the better-informed party to show its quality to the less-informed party, for example offering a warranty or obtaining a qualification.
The role of prices in passing information to consumers and producers about changes in market conditions, such as a rise in demand or a fall in supply.
A measure of development based on one variable, such as GNI per capita, life expectancy or the adult literacy rate, rather than a combination of several.
The failure of a government to make payments of interest or principal on its debt when they are due.
A state-owned investment fund that invests a country’s surplus revenue, often from exports of oil or other commodities, in foreign and domestic financial assets.
The situation in which a firm or industry produces less than it could with its existing factors of production, so that output can be increased quickly without new investment.
A designated area of a country with its own, usually more liberal, rules on trade, tax, customs and regulation, often with ready-built infrastructure, set up to attract investment, especially for export production.
The concentration of a country, region, firm or worker on producing a narrow range of goods or services, and obtaining other goods through exchange.
An indirect tax of a fixed amount of money per unit of a good sold, which shifts the supply curve upwards by the amount of the tax, parallel to the original curve.
Buying or selling an asset, such as a currency, in order to profit from an expected future change in its price.
The combination of high or rising inflation with stagnant or falling real output and rising unemployment, typically caused by an adverse supply shock.
Individuals or groups affected by an economic decision or policy, such as consumers, producers, workers, the government and society as a whole.
A business that is owned and controlled by the government rather than by private shareholders, such as many electricity, water and railway companies.
The tendency for people to stay with their current situation or a default option, even when switching would make them better off; a form of inertia.
Market-oriented reforms, such as cutting government spending and subsidies, devaluing the currency, liberalising trade and prices and privatising state firms, required by the IMF and World Bank as loan conditions, especially in the 1980s and 1990s.
Long-term unemployment caused by a mismatch between workers’ skills or location and the jobs available, after changes in the structure of the economy, or by labour market rigidities.
A payment by the government to producers, usually per unit of output, that lowers their costs and shifts the supply curve downwards, raising output and lowering the price.
Goods that can be used in place of each other, so that a rise in the price of one increases the demand for the other.
The change in quantity demanded that results from a good becoming relatively cheaper or dearer than its substitutes when its price changes.
The tendency in some markets for a few top performers to earn a very large share of total income, because technology lets them serve a mass market and buyers strongly prefer the best.
The quantities of a good or service that producers are willing and able to offer for sale at each possible price during a given time period, ceteris paribus.
A graph showing the quantity supplied of a good at each possible price, ceteris paribus; it normally slopes upwards from left to right.
A table listing the quantity of a good supplied at each of a range of prices, for one producer or for the whole market, ceteris paribus.
A sudden, unexpected change in the costs or availability of inputs, such as a jump in oil prices or a natural disaster, that shifts the SRAS curve.
Government policies that aim to increase an economy's productive capacity by improving the quantity and quality of factors of production and the efficiency of markets, shifting LRAS to the right.
Meeting the needs of the present generation without reducing the ability of future generations to meet their own needs, by limiting resource depletion and environmental damage.
Development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.
Seventeen goals with 169 targets, adopted by all UN member states in 2015, to end poverty, reduce inequality and protect the environment by 2030; they apply to every country.
A level of government debt that can continue to be serviced without ever-larger tax rises or spending cuts, a sharp rise in borrowing costs, or default.
The combining of several pieces of theory, evidence and argument into one coherent answer that addresses the question as a whole.
A business whose main aim is a social or environmental goal, which earns most of its income by selling goods or services and reinvests most of its profit in that goal rather than paying it to owners.