Economics/Glossary

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A

Adverse selection [r]: a partial market failure that occurs when there are traders who take advantage of asymmetric information, raising uncertainty and leading to a reduction in the value of its products. ^[e]
Agency cost^[1]
Applied statistics [r]: the practice of collecting and interpreting numerical observations for the purpose of generating information. ^[e]
Arbitrage [r]: transactions to take advantage of a price differences of a product in different markets by buying where it is cheap and selling where it is dear. The possibility of arbitrage often prevents the occurrence of price differences. ^[e]
Asset price bubble [r]: The condition of an asset market in which price is governed by speculators' expectations that it will increase. ^[e]
Asymmetric shock [r]: Add brief definition or description
Austrian School of economics [r]: A school of economists who reject the tenets of macroeconomics and oppose the practice of collective economic management; and whose methodology concentrates upon the decisions of individuals and the operation of the market mechanism. ^[e]

B

Balassa-Samuelson effect [r]: A tendency for productivity increases in the traded sector to lead to a rise in the relative price of nontradables. ^[e]
Basis point [r]: (bp) one hundredth of a percentage point . ^[e]
Beveridge curve [r]: A curve (convex when viewed from the origin) showing a relationship between vacancies and unemployment. ^[e]
Bubble (economics) [r]: A surge in prices that raises expectations of further increases, so generating further increases: a process that continues until confidence falters, the bubble "bursts" and prices rapidly revert to an objectively-based level. ^[e]
Budget balance [r]: the difference between a central government's revenue and its expenditure in a given financial year. Conventions differ concerning the items that are included, and various cyclical adjustments can be made to identify its discretionary element.. ^[e]
Budget deficit [r]: the excess of a government's expenditures over its receipts. See also cyclically-adjusted budget deficit ^[e]

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C

Circular flow of income [r]: A model of the economy in which income flows from firms to households in the form of wages and salaries, and from households to firms in the form of spending on goods and services, and in which other subsidiary flows can be specified. ^[e]
Classical unemployment [r]: Unemployment that results from setting the wage rate at a level at which the demand for labour falls short of its supply. ^[e]
Competition [r]: The activity or condition of competing against others. Ecologically, the interaction between species or organisms which share a limited environmental resource. ^[e]
Complex interactive system [r]: A system in which an event in one of its components can have significant repercussions in many other components; and which can exist in more states than can be enumerated - including "open systems" whose operation is affected by events that have been generated from outside (such as international trade in the case of an economic system). ^[e]
Concentration ratio [r]: A ratio that shows the extent to which a market is dominated by a small group of suppliers. An example is the 5-firm concentration ratio, which is the percentage of total sales of a product that is supplied by the five largest suppliers. An alternative measure is the Herfindahl Index ^[e]
Consequentialism [r]: The belief that the expected consequences of decisions should be the sole criterion of decision-making (in contrast to deontology). ^[e]
Consumer's surplus [r]: The excess of the amount that a consumer would be willing to pay for a product over its market price, changes in the value of which are usually estimated according to the rule of one-half. ^[e]
Consumption function [r]: Add brief definition or description
Contingent employment [r]: Add brief definition or description
Corporation [r]: Add brief definition or description
Covariance [r]: Add brief definition or description
Creative destruction [r]: Add brief definition or description
Cross elasticity of demand [r]: Add brief definition or description
Cyclically-adjusted budget deficit [r]: Add brief definition or description
Cyclical deficit [r]: Add brief definition or description

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