Glossary of Economic Terms & Definitions
Contained in this glossary of economic terms is a list of definitions of fundamental terms and concepts used in economics, a social science that studies the production, distribution, and consumption of goods and services.
b
- balance of payments - The balance of payments (BoP) is a record of all economic transactions between a country and the rest of the world over a period of time. It's a tool used to... More
- bourgeoisie - The bourgeoisie is the ruling class in Marx's theory of class struggle under capitalism. The bourgeoisie is the property-owning class who own the means of production (e.g. factories) and employ and... More
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- capital expenditure - Capital expenditure is money spent by a business to buy, maintain, or improve long-term assets like buildings, equipment, and land. These assets are expected to benefit the business for many years. More
- capital flight - Capital flight is a large-scale movement of money and assets out of a country. It can be a result of political or economic events, such as currency devaluation, political instability, or... More
- centrally planned - A centrally planned economy or command economy, is an economic system where the government has complete control over the production and distribution of goods and services. The government decides what to... More
- conglomerate - Economics definition: A conglomerate is a type of multi-industry company that consists of several different and unrelated business entities that operate in various industries under one corporate group. Geology definition: Conglomerate... More
- consumer sovereignty - Consumer sovereignty is an economic concept where consumers decide what goods and services they want to buy, and businesses must produce those goods and services in order to make a profit. More
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- derived demand - This is an economic term that describes the demand for a good or service that is a result of the demand for another good or service. It's based on the idea... More
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- economies of scale - In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation and are typically measured by the amount of output produced per unit of... More
- external sector - The external sector performance of any economy reflects the economic transactions between the residents of an economy and the rest of the world. In the goods market, the external sector involves... More
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- fiscal reform - Fiscal reform is the process of changing a country's tax policies and spending priorities to improve the economy. The goal is to make the economy more efficient, equitable, and sustainable. More
- Foreign exchange reserves - Foreign exchange reserves are assets in foreign currencies that are held on reserve by a nation's central bank. These reserves are used as backup funds if their national currency rapidly devalues.... More
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- Gross Domestic Product - Gross Domestic Product (GDP) is a measure of a country's national income, representing the total monetary value of all goods and services produced within a country's borders during a specific period,... More
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- homogeneous products - Homogeneous products imply that the products are identical in quality, shape, size and colour. So, no producer is in a position to charge a different price. Examples include wheat, crude oil,... More
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- laissez-faire - The French phrase laissez-faire refers to the practice of allowing people or institutions to act or behave however they want, with little or no interference or regulation. More
- law of diminishing returns - The law of diminishing returns says that, if you keep increasing one factor in the production of goods (such as your workforce) while keeping all other factors the same, you’ll reach... More
- liquidity - Liquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price. Liquid assets refer to cash on hand,... More
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- monetary policy - Central banks use monetary policy to manage economic fluctuations and achieve price stability, which means that inflation is low and stable. More
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- production quota - A production quota is a goal for the production of a good. It is typically set by a government or an organization and can be applied to an individual worker, firm,... More
- proximate cause - Proximate cause refers to an event or action that the court deems to be the primary and legal cause of a particular injury. It is the direct cause of a loss... More
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- reserve ratio - The reserve ratio – also known as bank reserve ratio, bank reserve requirement, or cash reserve ratio – is the percentage of deposits a financial institution must hold in reserve as... More
s
- social amenities - Social amenities, or public amenities, refer to places, buildings or infrastructural facilities which are to be shared and to become convergence spots for the local and surrounding communities. Examples include good... More
- subrogation - Subrogation is when you file a claim with your insurer, the company can try to recover its costs from the person responsible for your injury or property. It occurs when your... More
- subsidy - A subsidy is a benefit given by the government to groups or individuals, usually in the form of a cash payment or tax reduction. If something like food or petrol is... More
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- Tiger Cub economies - The Tiger Cub economies are Southeast Asia's emerging economies: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. While still in their early stages of development, the Tiger Cub Economies hold promise for... More