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Documents for "Economics: Terms and Concepts":

• absentee ownership system under which a person (or a corporation) controls and derives income from land in a region where he does not reside. Abuses existed in absenteeism in pre-Revolutionary France, in 19th-century...

• affluent society term coined by John Kenneth Galbraith in The Affluent Society (1958) to describe the United States after World War II. An affluent society, as the term was used ironically by Galbraith, is rich in private resources but poor in public ones because of a...

• balance of payments balance between all payments out of a country within a given period and all payments into the country, an outgrowth of the mercantilist theory of balance of trade. Balance of payments includes all payments between a country and its trading partners and is made up of the balance of trade, private foreign loans and their interest, loans and grants by...

• balance of trade relation between the merchandise exports and imports of a country. The concept first became important in the 16th and 17th cent. with the growth of mercantilism. Mercantilist theorists believed that a country should have an excess of exports over imports (i.e., a favorable balance of trade) to bring money, which they confused with wealth, into the country...

• Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel see under Nobel Prize.

• Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel YearRecipient(s) 1969 Ragnar Frisch Jan Tinbergen 1970 Paul A. Samuelson 1971 Simon Kuznets 1972 Sir John R. Hicks Kenneth...

• barter see exchange.

• bonus extra amount in money, bonds, or goods over what is normally due. The term is applied especially to payments to employees either for production in excess of the normal (wage incentive) or as a...

• bounty amount paid by a government for the achievement of certain economic or other goals. It often takes the form of a premium paid for the increased production or export of certain goods. The bounty was...

• boycott concerted economic or social ostracism of an individual, group, or nation to express disapproval or coerce change. The practice was named (1880) after Capt. Charles Cunningham Boycott, an English...

• budget inclusive list of proposed expenditures and expected receipts of any person, enterprise, or government for a specified period, usually one year. Budget estimates are based on the expenditures and...

• business cycles fluctuations in economic activity characterized by periods of rising and falling fiscal health. During a business cycle, an economy grows, reaches a peak, and then begins a downturn followed by a...

• capital in economics, the elements of production from which an income is derived, usually defined with the exception of land and labor. As originally used in business, capital denoted interest-bearing...

• capitalism economic system based on private ownership of the means of production, in which personal profit can be acquired through investment of capital and employment of labor. Capitalism is grounded in the...

• cartel national or international organization of manufacturers or traders allied by agreement to fix prices, limit supply, divide markets, or to fix quotas for sales, manufacture, or division of profits...

• combination in business: see trust.

• commerce traffic in goods, usually thought of as trade between states or nations. Engaged in by all peoples from the earliest times, it has been carried on in some areas and by some peoples more than...

• commercial revolution in European history, a fundamental change in the quantity and scope of commerce. In the later Middle Ages steady economic expansion had seen the rise of towns and the advent of private banking, a...

• competition in economics, rivalry in supplying or acquiring an economic service or good. Sellers compete with other sellers, and buyers with other buyers. In its perfect form, there is competition among many...

• Consumer Price Index see cost of living.

• consumption in economics, direct utilization of goods and services by consumers, not including the use of means of production, such as machinery and factories (see capital ). Consumption can be divided into public and private sectors. Consumption is also viewed as a basically subjective phenomenon, with individual utility, or satisfaction, assuming primary importance...

• corporative state economic system inaugurated by the Fascist regime of Benito Mussolini in Italy. It was adapted in modified form under other European dictatorships, among them Adolf Hitler's National Socialist...

• cost of living amount of money needed to buy the goods and services necessary to maintain a specified standard of living. The cost of living is closely tied to rates of inflation and deflation. In estimating such costs, food, clothing, rent, fuel, lighting, and furnishings as well as expenses for communication, education, recreation, transportation, and medical services are...

• crisis, economic see depression.

• deflation see inflation.

• demand and supply see supply and demand.

• depreciation in accounting , reduction in the value of fixed or capital assets, as by use, damage, weathering, or obsolescence. It can be estimated according to a number of methods. In the straight-line method, depreciation...

• depression in economics, period of economic crisis in commerce, finance, and industry, characterized by falling prices, restriction of credit, low output and investment, numerous bankruptcies, and a high...

• diminishing returns, law of in economics, law stating that if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. Thus, for example, if...

• distribution in economics, the allocation of a society's total wealth among various economic groups. Distribution, in that sense, does not refer to the physical marketing or circulation of goods, which is part of the process of exchange, but to the relative well-being and economic wealth of persons and groups. By classifying people according to their share of the...

• division of labor in economics, the specialization of the functions and roles involved in production. Division of labor is closely tied with the standardization of production, the introduction and perfection of...

• dumping selling goods at less than the normal price, usually as exports in international trade. It may be done by a producer, a group of producers, or a nation. Dumping is usually done to drive competitors...

• e-commerce commerce conducted over the Internet , most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers....

• econometrics technique of economic analysis that expresses economic theory in terms of mathematical relationships and then tests it empirically through statistical research. Econometrics attempts to develop...

• economic planning control and direction of economic activity by a central public authority. In its modern usage, economic planning tends to be pitted against the laissez-faire philosophy which developed in the 18th cent. Proponents of laissez faire believed that an economy works best when there is little government interference. The contemporary economic model of...

• economics study of how human beings allocate scarce resources to produce various commodities and how those commodities are distributed for consumption among the people in society (see distribution ). The essence of economics lies in the fact that resources are scarce, or at least limited, and that not all human needs and desires can be met. How to distribute these resources in the most...

• efficiency 1 In business and industry, see industrial management ; productivity. 2 In physics, see machine ; work.

• entrepreneur [Fr.,=one who undertakes], person who assumes the organization, management, and risks of a business enterprise. It was first used as a technical economic term by the 18th-century economist Richard...

• exchange mutual transfer of goods, money, services, or their equivalents; also the marketplace where such transfer occurs, such as a stock exchange or a commodity exchange. In early human society, exchange of unessential articles, such as jewelry, was common, but no group could afford to rely on another group for the necessities of life...

• fee in property law: see property ; tenure.

• free enterprise system see capitalism.

• free silver in U.S. history, term designating the political movement for the unlimited coinage of silver.

• free trade in modern usage, trade or commerce carried on without such restrictions as import duties, export bounties, domestic production subsidies, trade quotas, or import licenses. The basic argument for...

• Gresham's law see under Gresham, Sir Thomas.

• gross domestic product see gross national product.

• gross national product (GNP), in economics, a quantitative measure of a nation's total economic activity, generally assessed yearly or quarterly. The GNP equals the gross domestic product plus income earned by domestic residents through foreign investments minus the income earned by foreign investors in the domestic market. Gross domestic product, often confused with GNP, is...

• holding company see corporation.

• incorporation see corporation.

• index number in econometrics, a figure reflecting a change in value or quantity as compared with a standard or base. The base usually equals 100 and the index number is usually expressed as a percentage. For...

• industrial management term applied to highly organized modern methods of carrying on industrial, especially manufacturing, operations.

• industrial policy government-sponsored economic program in which the public and private sectors coordinate their efforts to develop new technologies and industries. Government provides the financial support and...

• inflation in economics, persistent and relatively large increase in the general price level of goods and services. Its opposite is deflation, a process of generally declining prices. The U.S. Bureau of Labor...

• installment buying and selling buying and selling of goods on credit, with the stipulation that payments shall be made at specified intervals in set amounts. The goods may be used by the buyer before or upon first payment, but...

• joint stock company see chartered companies.

• labor, division of see division of labor.

• laissez-faire [Fr.,=leave alone], in economics and politics, doctrine that an economic system functions best when there is no interference by government. It is based on the belief that the natural economic order...

• management see industrial management.

• Manchester school group of English political economists of the 19th cent., so called because they met at Manchester. Their most outstanding leaders were Richard Cobden and John Bright. Their chief tenet was that the...

• market research organized use of sample surveys, polls , focus groups, and other techniques to study market characteristics (e.g., ages and incomes of consumers; consumer attitudes) and improve the efficiency of sales and distribution. Development of...

• marketing in economics, that part of the process of production and exchange that is concerned with the flow of goods and services from producer to consumer. In popular usage it is defined as the distribution...

• mass production see production.

• mercantilism economic system of the major trading nations during the 16th, 17th, and 18th cent., based on the premise that national wealth and power were best served by increasing exports and collecting...

• merger in corporate business, fusion of two or more corporations by the transfer of all property to a single corporation. The remaining corporation continues in existence, having absorbed the other(s)...

• monopoly market condition in which there is only one seller of a certain commodity; by virtue of the long-run control over supply, such a seller is able to exert nearly total control over prices. In a pure...

• Nobel Memorial Prize in Economic Sciences see Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel under Nobel Prize.

• oligopoly see monopoly.

• personal property see property.

• personnel management see industrial management.

• price amount of money for which a unit of goods or services is exchanged. Price is equivalent to market value and may or may not measure the intrinsic value of the goods or services to the buyer or...

• privatization see nationalization.

• production in economics, all those activities that have to do with the creation of commodities, by imparting to raw materials utility, added value, or the ability to satisfy human wants. The farmer who grows...

• productivity in economics, the output of any aspect of production per unit of input. It is a measure of the output of a worker, machine, or an entire national economy in the creation of goods and services to...

• profit in economics, return on capital, also called earnings, minus the costs of maintaining land, labor, and capital. It is also known as net income. Economic theorists generally make a distinction...

• profit sharing arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced...

• property rights to the enjoyment of things of economic value, whether the enjoyment is exclusive or shared, present or prospective. The rightful possession of such rights is called ownership. Ownership necessarily is supported by correlative rights to exclude others from enjoyment. By extension of usage, the things in which one has property rights are called one's property; thus the...

• protection practice of regulating imports and exports with the purpose of shielding domestic industries from foreign competition. To accomplish that end, certain imports may be excluded entirely, import...

• public ownership government ownership of lands, streets, public buildings, utilities, and other business enterprises. The theory that all land and its resources belong ultimately to the people and therefore to the...

• rationing allotment of scarce supplies, usually by governmental decree, to provide equitable distribution. It may be employed also to conserve economic resources and to reinforce price and production...

• real estate see property.

• real property see property.

• rebate partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. The...

• recession see depression.

• reciprocal trade agreement international commercial treaty in which two or more nations grant equally advantageous trade concessions to each other. It usually refers to treaties dealing with tariffs. For example, one nation...

• rent control in economics and law, government regulation of rent to prevent unreasonable or excessive increases. In the United States, the federal government imposed rent control (and other price controls)...

• revenue see finance.

• scientific management see industrial management.

• sinking fund sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt. A preferred investment for a sinking fund is the purchase...

• stagflation in economics, a word coined in the 1970s to describe a combination of a stagnant economy and severe inflation. Previously, these two conditions had not existed at the same time because lowered demand,...

• standard of living level of consumption that an individual, group, or nation has achieved. The evaluation of a standard of living is relative, depending upon the judgment of the observer as to what constitutes a high...

• subsidy financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. Subsidies...

• supply and demand in classical economics, factors that are said to determine price, by correlating the amount of a given commodity producers hope to sell at a certain price (supply), and the amount of that commodity...

• supply-side economics economic theory that concentrates on influencing the supply of labor and goods as a path to economic health, rather than approaching the issue through such macroeconomic concerns as gross national...

• telemarketing the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. Telemarketing firms use trained staff and...

• trade traffic in goods. Conducted by gift, barter, or sale, trade is one of the most widespread of all social institutions.

• trade association group of business people in the same trade or industry organized for the advancement of common interests. The trade association differs from the chamber of commerce in that membership is by industry rather than by locality. The common interests binding the members of the trade association may include credit, public relations, relations with employees, sales...

• utility in economics: see value.

• value in economics, worth of a commodity in terms of other commodities, or in terms of money (see price ). Value depends on both desirability and scarcity. The marginal theory of value, pioneered in the late 19th cent. by Leon Walras , Stanley Jevons , and Carl Menger , has been highly influential in economics. It takes account of both scarcity and desirability by holding that the total value of a good depends on the utility rendered by the last unit consumed. It...

• wage and price controls economic policy measure in which the government places a ceiling on wages and prices to curb inflation. Also known as incomes policy, such programs have generally been avoided in the United States...

• wages payment received by an employee in exchange for labor. It may be in goods or services but is customarily in money. The term in a broad sense refers to what is received in any way for labor, but...