26 of the Economics glossary’s terms, each with the part of the syllabus where you first meet it.
Cooperation between firms without any formal or explicit agreement, for example when firms follow the price changes of a price leader.
Government spending on goods and services, such as free school meals, social housing or health care, that is directed at particular low-income or disadvantaged groups.
A tax on imported goods, either a fixed amount per unit or a percentage of their value, which raises their price in the domestic market.
A compulsory payment to the government, charged on incomes, profits, wealth or spending; taxes are a leakage from the circular flow of income.
The legal use of loopholes, allowances or the relocation of income and profits to reduce the tax paid, unlike tax evasion, which is illegal concealment of income.
How the burden of an indirect tax is shared between consumers, through a higher price paid, and producers, through a lower price received; it depends on PED and PES.
The precise vocabulary of economics; in the internal assessment, criterion B rewards using terms relevant to the article accurately and throughout a commentary.
The part of the economy that provides services, such as retail, transport, finance, education, health care and tourism.
A person, firm or group that is not directly involved in buying or selling a good but is affected by its production or consumption.
Aid that must be spent on goods and services from the donor country, or on projects the donor chooses, rather than wherever the recipient can obtain the best value.
The delays between a change in economic conditions and the recognition of the problem, the decision on a policy, its implementation and its full effect on the economy.
The expectation that a government will rescue a very large financial institution because its collapse would damage the whole economy, which creates moral hazard by reducing the institution’s cost of risk-taking.
The sum of all the costs a firm incurs to produce a given level of output: total fixed costs plus total variable costs (TC = TFC + TVC).
The total quantity of output a firm produces with a given quantity of factors of production in a period.
The total amount of money a firm receives from selling its output, equal to the price multiplied by the quantity sold.
The total satisfaction a consumer gains from consuming a given quantity of a good or service in a period.
A scheme in which a government caps total pollution, issues permits to emit up to the cap, and lets firms buy and sell the permits, so emissions are cut where it is cheapest to do so.
The replacement of higher-cost domestic production by lower-cost imports from a partner country when a trading bloc removes tariffs between its members, raising efficiency.
The switch of imports from a lower-cost producer outside a trading bloc to a higher-cost producer inside it, caused by removing tariffs only between members, reducing efficiency.
The reduction or removal of barriers to international trade, such as tariffs, quotas and subsidies to domestic producers.
Government measures that restrict imports or favour domestic producers over foreign ones, such as tariffs, quotas, subsidies and administrative barriers.
A situation where having more of one thing means having less of another, because scarce resources can only be used once.
A group of countries that agree to reduce or eliminate tariffs and other barriers to trade between them, such as a free trade area, a customs union or a common market.
The overuse and depletion of a common pool resource that happens when each user, acting in their own interest, takes more of it because the cost of depletion is shared by all users.
Payments from the government to individuals, such as pensions, unemployment benefits and child benefits, for which no good or service is provided in return.
The lowest point of real GDP in a business cycle, where a contraction ends and recovery begins.