sohomghosh/FinRAD_Financial_Readability_Assessment_Dataset

terms stringlengths 1 156	definitions stringlengths 3 4.2k	source stringclasses 15 values	assigned_readability int64 0 1	flesch_reading_ease float64 -301.79 121	flesch_kincaid_grade float64 -3.5 55.6	smog_index float64 0 26.5	coleman_liau_index float64 -33.81 51.4	automated_readability_index float64 -6.9 65	dale_chall_readability_score float64 0.1 35.3	linsear_write_formula float64 -0.5 73	gunning_fog float64 0.4 56
Monopsony	The mirror image of monopoly: a market in which there is a single buyer; a “buyer’s monopoly.” Moral hazard. A type of market failure in which the presence of insurance against an insured risk increases the likelihood that the risky event will occur. For example, a car owner insured 100 percent against auto theft may be careless about locking the car because the presence of insurance reduces the incentive to prevent the theft. MPC . See marginal propensity to consume. MPS . See marginal propensity to save.	sam	1	2.96	23.4	0	11.85	23.4	11.32	10.9	20.76
Multiplier	A term in macroeconom-ics denoting the change in an induced variable @such as GDP or money supply@ per unit of change in an external variable @such as government spending or bank reserves@. The expenditure multiplier denotes the increase in GDP that would result from a $1 increase in expenditure @say, on investment@.	sam	1	36.63	14.6	0	11.55	15.7	10.7	17	14.25
Nash equilibrium	In game theory, a set of strategies for the players where no player can improve his or her payoff given the other play-er’s strategy. That is, given player A’s strategy, player B can do no better, and given B’s strategy, A can do no better. The Nash equi-librium is also sometimes called the noncooperative equilibrium.	sam	1	35.98	12.8	11.9	9.63	10.4	8.85	11.5	10.96
National debt	Same as government debt.	sam	1	50.5	7.2	0	5.8	5.3	7.78	2	1.6
National income and product accounts	@NIPA@. A set of accounts that measures the spending, income, and output of the entire nation for a quarter or a year. National saving rate. Total saving, private and public, divided by net domestic product.	sam	1	-6.36	22.8	0	10.34	19.3	11.69	5.833333	17.43
Natural monopoly	A firm or industry whose average cost per unit of production falls sharply over the entire range of its output, as, e.g., in local electricity distribution.	sam	1	45.09	13.4	0	10.91	15.3	14.04	18	16.55
Natural rate of unemployment	The same concept as the nonacceler- ation rate of unemploy-ment @	sam	1	44.41	9.6	0	11.4	9.5	12.03	6.5	12
Net domestic product NDP	GDP less an allowance for depreciation of capital goods.	sam	1	45.42	9.2	0	11.22	8.2	9.35	5.5	8.04
Net exports	In the national product accounts, the value of exports of goods and services minus the value of imports of goods and services.	sam	1	40.69	13.1	0	9.86	12	9.75	12	10.62
Net foreign investment	Net saving by a country abroad; approxi-mately equal to net exports. Net investment. Gross investment minus depreciation of capital goods.	sam	1	-8.05	19.3	0	15.78	16.6	11.73	6.5	12
Net worth	In accounting, total assets minus total liabilities. New classical macroeconomics. A theory which holds that @1@ prices exible and @2@ peo-ple make forecasts in accordance with the rational-expectations hypothesis.	sam	1	-42.57	26.4	0	18.52	23.3	15.96	6.833333	25.39
Nonaccelerating inflation rate of unemployment	An unem- ployment rate that is consistent with a constant infl ation rate. At the NAIRU, upward and downward forces on price and wage infl ation are in balance, so there is no ten- dency for infl ation to change. The NAIRU is the unemployment rate at which the long-run Phillips curve is vertical.	sam	1	70.13	8	8.8	7.77	8.9	8.92	9	9.42
Phillips curve	A graph, fi rst devised by A. W. Phillips, showing the tradeoff between unemployment and infl ation. In modern main- stream macroeconomics, the downward-sloping “tradeoff” Phil- lips curve is generally held to be valid only in the short run; in the long run, the Phillips curve is usu- ally thought to be vertical at the nonaccelerating infl ation rate of unemployment (NAIRU).	sam	1	50.46	11.4	12.5	10.85	12.9	11.03	13	11.51
Noncooperative equilibrium	See Nash equillibrium	sam	1	9.21	12.7	0	11.15	9.9	14.31	1.5	14.53
Nonrenewable resources	Those natural resources, like oil and gas, that are essentially fi xed in sup- ply and whose regeneration is not quick enough to be economically relevant.	sam	1	36.63	14.6	0	10.91	14.9	11	18	18.09
Not in the labor force	That part of the adult population that is neither working nor looking for work. O	sam	1	47.79	10.3	0	7.65	7.1	9.64	7.5	8.67
Okun’s Law	The empirical relation-ship, discovered by Arthur Okun, between cyclical movements in GDP and unemployment. The law states that when actual GDP declines 2 percent relative to potential GDP, the unemployment rate increases by about 1 per-centage point. @Earlier estimates placed the ratio at 3 to 1.@	sam	1	31.21	14.6	0	13.76	16.1	13.02	17.5	18.77
Oligopoly	A situation of imperfect competition in which an industry is dominated by a small number of suppliers. Open economy. An economy that engages in international trade @i.e., imports and exports@ of goods and capital with other coun-tries. A closed economy is one that has no imports or exports.	sam	1	13.28	17.4	0	11.32	14.5	9.76	11.666667	16.27
Open-market operations	The activity of a central bank in buying or u-ence bank reserves, the money supply, and interest rates. If secu-rities are bought, the money paid out by the central bank increases commercial-bank reserves, and the money supply increases. If securities are sold, the money sup-ply contracts.	sam	1	39.03	11.6	11.9	11.53	11.3	10.23	9	10.47
Opportunity cost	The value of the best alternative use of an economic good. Thus, say that the best alter-native use of the inputs employed to mine a ton of coal was to grow 10 bushels of wheat. The oppor-tunity cost of a ton of coal is thus the 10 bushels of wheat that could have been produced but were not.	sam	1	77.27	7.3	9.7	5.63	7.3	7.86	11	9.79
Ordinal utility	A dimensionless util-ity measure used in demand the-ory.	sam	1	21.06	12.3	0	13.7	11.4	13.9	6	8.2
Outputs	The various useful goods or services that are either consumed or used in further production. P Paradox of thrift. The principle, rst proposed by John Maynard Keynes, that an attempt by a soci-ety to increase its saving may result in a reduction in the amount which it actually saves. Paradox of value. The paradox that many necessities of life @e.g., water@ have a low “market” value while many luxuries @e.g., dia-monds@ with little “use” value have a high market price. It is explained ects not the total utility of a commodity but its marginal utility.	sam	1	6.34	24.2	0	10.52	25.2	11.64	10.083333	23.21
Pareto efficiency or Pareto optimality	A situation in which no reor-ganization or trade could raise the utility or satisfaction of one indi-vidual without lowering the utility or satisfaction of another individ-ual. Under certain limited condi-tions, perfect competition leads ciency. Also called allocative ef ciency. Partial-equilibrium analysis. Analy-sis concentrating on the effect of changes in an individual market, holding other things equal @e.g., disregarding changes in income@.	sam	1	-16.82	20.6	17.9	18.1	18.8	13.19	12.625	17.96
Partnership	An association of two or more persons to conduct a business which is not in corporate form and does not enjoy limited liability.	sam	1	39.67	13.4	0	9.52	11.8	8.9	15.5	16.16
Patent	An exclusive right granted to an inventor to control the use of an invention for, in the United States, a period of 20 years.	sam	1	55.58	11.5	0	6.97	10.6	10.09	16	16.27
Payoff table	In game theory, a table used to describe the strategies and payoffs of a game with two or ts or utili-ties of the different players are the payoffs.	sam	1	34.6	15.4	0	7.43	12.9	8.97	17	12.63
Payoffs	See payoff table.	sam	1	34.59	9.2	0	1.52	3.6	9.05	0.5	1.2
Policy-ineffectiveness	A theorem which asserts that, with ex-ible prices and wages, anticipated government monetar scal policy cannot affect real output or unemployment. Portfolio theory. An economic theory that describes how ratio-nal investors allocate their wealth nancial assets—that is, how they put their wealth into a “portfolio.” Positive economics. See normative vs. positive economics.	sam	1	-48.99	33	0	18.18	33.6	14.41	15.333333	30.03
Post hoc fallacy	From the Latin, post hoc, ergo propter hoc, which translates as “after this, therefore because of this.” This fallacy arises when it is assumed that because event A precedes event B, it follows that A causes B. Potential GDP. High-employment GDP; more precisely, the maxi-mum level of GDP that can be sustained with a given state of tech-nology and population size without ation. Today, it is generally taken to be equivalent to the level of output corresponding to the ation rate of unemployment	sam	1	20.89	20.7	0	11.51	22.8	11.4	17.5	21.42
Potential output	is not necessarily maximum output.	sam	1	-1.29	14.7	0	11.92	9.3	13.36	3.5	18
Poverty	Today, the U.S. government nes the “poverty line” to be the minimum adequate standard of living. PPF. See production-possibility fron-tier. Present value @of an asset@. Today’s value for an asset that yields a stream of income over time. Val-uation of such time streams of returns requires calculating the present worth of each component of the income, which is done by applying a discount rate @or inter-est rate@ to future incomes.	sam	1	10.57	20.5	0	11.96	20.6	11.69	7.8	18
Price	The money cost of a good, service, or asset.	sam	1	79.26	4.4	0	2.23	1.9	5.84	3.5	3.6
Private good	See public good. Producer price index. The price index of goods sold at the whole-sale level @such as steel, wheat, oil@. Producer surplus. The difference between the producer sales rev-enue and the producer cost. The producer surplus is generally mea-sured as the area above the supply curve but under the price line up to the amount sold.	sam	1	25.63	16.8	0	10.57	16.3	8.1	6.1	12.8
Product, average	Refer to average product.	sam	1	8.2	13.1	0	7.25	6.5	15.68	2	11.6
Product, marginal	Refer to marginal product. Product differentiation. The exis-tence of characteristics that make similar goods less-than-perfect substitutes. Thus locational dif-ferences make similar types of gasoline sold at separate points imperfect substitutes.	sam	1	-19.9	19.8	0	22.73	20.3	13.33	8	15.33
Production function	A relation @or mathematical function@ specifying the maximum output that can be produced with given inputs for a given level of technology; applies rm or, as an aggregate pro-duction function, to the economy as a whole.	sam	1	1.1	22.1	0	11.85	20.6	12	26	22.18
Production-possibility frontier	PPF @. A graph showing the menu of goods that can be produced by an economy. In a frequently cited case, the choice is reduced to two goods, guns and butter. Points out-side the PPF @to the northeast of it@ are unattainable. Points inside cient since resources are not being fully employed, resources are not being used prop-erly, or outdated production tech-niques are being utilized.	sam	1	46.78	10.7	9.5	10.15	10.2	10.1	8.375	8.9
Productive efficiency	A situation in which an economy cannot pro-duce more of one good without producing less of another good; this implies that the economy is on its production-possibility frontier.	sam	1	26.14	16.6	0	13.23	17.8	10.1	20	18.34
Productivity	A term referring to the ratio of output to inputs @total out-put divided by labor inputs is labor productivity @.	sam	1	26.81	14.2	0	10.21	11.4	11.23	13	13.92
Progressive, proportional, and regresive taxes	A progressive tax weighs more heavily upon the rich; a regressive tax does the opposite. More precisely, a tax is progressive if the average tax rate (i.e., taxes divided by income) is higher for those with higher incomes; it is a regressive tax if the average tax rate declines with higher incomes; it is a proportional tax if the average tax rate is equal at all income levels.	sam	1	45.43	15.4	0	9.01	17.2	8.81	23	18.31
Property rights	Rights that define the ability of individuals or firms to own, buy, sell, and use the capital goods and other property in a market economy.	sam	1	37.64	14.2	0	8.77	12.7	9.3	17.5	16.4
Proportional tax	See progressive, proportional, and regressive taxes. Proprietorship, individual. A busi- rm owned and operated by one person.	sam	1	-55.77	25.3	0	17.22	17.3	13.77	6.25	20.92
Protectionism	Any policy adopted by a country to protect domestic industries against competition from imports @most commonly, a tariff or quota imposed on such imports@. Public choice @ also public-choice theory@. Branch of economics and political science dealing with the way that governments make choices and direct the economy. This theory differs from the the-ory of markets in emphasizing uence of vote maximizing for politicians, which contrasts to rms.	sam	1	3.63	21.1	0	14.98	21.9	11.66	12.25	20.56
Public debt	See government debt. Public good. A commodity whose ts are indivisibly spread among the entire community, whether or not particular individ-uals desire to consume the public good. For example, a public-health measure that eradicates polio pro-tects all, not just those paying for the vaccinations. To be contrasted with private goods, such as bread, which, if consumed by one person, cannot be consumed by another person. Pure economic rent. See rent, economic. Q	sam	1	4.82	18.6	15	13.12	16.2	9.87	7.166667	15.16
Quantity demanded	See change in demand vs. change in quantity demanded.	sam	1	53.88	8	0	8.67	6.6	11.1	5.5	12.49
Quantity equation of exchange	A tau-tology, MV PQ , where M is the money supply, V is the income veloc-ity of money, and PQ @price times quantity@ is the money value of total output @nominal	sam	1	7.19	19.7	0	6.69	14	12.49	19.5	16
Quantity theory of money and prices	A theory of the determination of output and the overall price level holding that prices move propor-tionately with the money supply. A more cautious approach put forth by monetarists holds that the money supply is the most impor-tant determinant of changes in nominal GDP @see monetarism @.	sam	1	39.67	13.4	0	13	15	11.64	15.75	15.29
Quota	A form of import protection-ism in which the total quantity of imports of a particular commodity @e.g., sugar or cars@ during a given period is limited. R	sam	1	1.77	19.7	0	9	14.4	13.16	19.5	19.69
Random-walk theory	@of stock market prices@. See efficient market.	sam	1	30.53	10.7	0	10.74	9.7	8.5	1.25	8.51
Rate of inflation	See infation.	sam	1	-49	20.6	0	1.3	7.8	11.63	1	20.8
Rate of return or return on capital	The yield on an investment or on a capital good. Thus, an investment costing $100 and yield-ing $12 annually has a rate of return of 12 percent per year.	sam	1	56.76	8.9	0	5.91	6.1	9.8	8.25	8.56
Rate of return on investment	The net dollar return per year for every dollar of invested capital. For example, if $100 of invest-ment yields $12 per year of return, the rate of return on investment is 12 percent per year. Rational expectations. See expec-tations. Rational-expectations hypothesis. A hypothesis which holds that peo-ple make unbiased forecasts and, further, that people use all avail-able information and economic theory to make these forecasts.	sam	1	-3.82	21.9	0	14.63	21.5	11.08	15.833333	19.15
Rational-expectations macroeconomics	A school holding that markets clear quickly and that expecta-tions are rational. Under these and other conditions it can be shown that predictable macro-economic policies have no effect on real output or unemployment. Sometimes called new classical macroeconomics.	sam	1	41.66	10.6	11.9	15.7	13	11.33	7.666667	12.45
Real-business-cycle RBC theory	A theory that explains business cycles purely as shifts in aggregate supply, primarily due to techno-logical disturbances, without any reference to monetary or other demand-side forces.	sam	1	-5.68	20.5	0	17.58	20.5	14.04	21	21.17
Real interest rate	The interest rate measured in terms of goods rather than money. It is thus equal to the money @or nominal@ interest rate ation.	sam	1	76.72	5.4	0	7	5.8	8.33	6.25	8.08
Real wages	The purchasing power of a worker’s wages in terms of goods and services. It is measured by the ratio of the money wage rate to the consumer price index.	sam	1	82.14	5.4	0	6.55	6	9.8	6.75	7.18
Recession	A period of significant decline in total output, income, and employment, usually last-ing from 6 months to a year and marked by widespread contrac-tions in many sectors of the econ-omy. See also depression.	sam	1	29.35	13.3	0	11.6	11.6	13.07	11.75	12.66
Regressive tax	See progressive, pro-portional, and regressive taxes.	sam	1	-95.36	28.1	0	21.68	19.3	17.09	5	22.4
Regulation	Government laws or rules designed to control the behavior of rms. The major kinds are economic regulation @which affects the prices, entry, or service of a single indus-try, such as telephone service@ and social regulation @which attempts to correct externalities that prevail across a number of industries, such as air or water pollution@. Renewable resources. Natural re-sources @like agricultural land@ whose services replenish regularly and which, if properly managed, can yield useful ser nitely. sam11290_glo.indd 672sam11290_glo.indd 6722/24/09 2:58:33 PM2/24/09 2:58:33 PM 673	sam	1	-3.99	24	0	17.07	27.9	14.34	18.666667	23.23
Rent, economic	Term applied to income earned from land. The total sup-ply of land available is @with minor cations@ xed, and the return paid to the landowner is rent. The term is often extended to the return paid to any factor xed supply—i.e., to any input having a perfectly inelastic or ver-tical supply curve.	sam	1	53.92	10	9.7	8.64	9.5	10.26	9	9.23
Required reserve ratio	That portion of deposits that a bank sets aside in the form of vault cash or non-interest-earning deposits with Fed-eral Reserve Banks. In the United States, banks are required to hold 10 percent of checking deposits @or transactions accounts@ in the form of reserves.	sam	1	57.61	10.7	0	11.31	13.6	10.83	12.5	10.62
Resource allocation	The manner in which an economy distributes its resources @its factors of production@ among the potential uses so as to produce a particular set of nal goods.	sam	1	44.07	13.8	0	10.51	14.9	11.41	18.5	18.21
Returns to scale	The rate at which output increases when all inputs are increased proportionately. For example, if all the inputs double and output is exactly doubled, that process is said to exhibit constant returns to scale. If, however, output grows by less than 100 percent when all inputs are doubled, the process shows decreasing returns to scale; if output more than doubles, the process demonstrates increas-ing returns to scale.	sam	1	29.01	17.5	0	13.01	20.2	10.48	13.833333	16.98
Ricardian view of fiscal policy	A theory developed by Harvard’s Robert Barro which holds that changes in tax rates have no impact upon consumption spending because households foresee, say, that tax cuts today will require tax increases nance the govern-ment’ financing requirements.	sam	1	17	20.1	0	16.26	24.3	14.01	25.5	21.29
Risk	Financial economics, refers to the variability of the returns on an investment.	sam	1	0.08	16.2	0	13.73	11.3	12.13	9	18.13
Saving function	The schedule show-ing the amount of saving that households or a nation will under-take at each level of income.	sam	1	60.65	9.5	0	10.21	11.1	8.73	10.5	7.6
Scarcity	The distinguishing charac-teristic of an economic good. That an economic good is scarce means not that it is rare but only that it is not freely available for the taking. To obtain such a good, one must either produce it or offer other economic goods in exchange.	sam	1	55.54	9.4	10.5	8.58	8.2	7.77	8.5	8.83
Schedule	@demand, supply, aggre-gate demand, aggregate supply@. Term used interchangeably with “curve,” as in demand curve, sup-ply curve, etc.	sam	1	28.5	11.5	0	14.76	13.7	11.1	5	8.04
Securities	A term used to designate nancial assets, such as stocks, bonds, options, and notes; more precisely, the docu-ments used to establish ownership of these assets.	sam	1	29.18	15.4	0	12.48	16.5	12.46	17.5	16.4
Short run	A period in which not all factors can adjust fully. In micro-economics, the capital stock and xed” inputs cannot be adjusted and entry is not free in the short run. In macroeconom-ics, prices, wage contracts, tax rates, and expectations may not fully adjust in the short run. Short-run aggregate supply sched-ule. The schedule showing the relationship between output and prices in the short run wherein changes in aggregate demand can affect output; represented by an upward-sloping or horizontal AS curve.	sam	1	27.45	16.1	14.6	12.83	17.1	11.08	10.4	14.68
Shutdown price	In the theory of the firm, the shut-down point comes at that point where the market price is just sufficient to cover average variable cost and no more. Hence, the firm’s losses per period just equal its fixed costs; it might as well shut down.	sam	1	65.56	9.7	0	8.01	10.7	9.31	13.25	12.56
Single-tax movement	A nineteenth-century movement, originated by Henry George, holding that continued poverty in the midst of steady economic progress was attributable to the scarcity of land owing to land-owners. The “single tax” was to be a tax on economic rent earned from landownership.	sam	1	33.24	13.8	0	13.52	14.7	11.45	14.5	14.11
Slope	In a graph, the change in the variable on the vertical axis per unit of change in the variable on the horizontal axis. Upward-sloping lines have positive slopes, downward-sloping curves @like demand curves@ have negative slopes, and horizontal lines have slopes of zero. Social insurance. Mandatory insur-ance provided by government to improve social welfare by prevent-ing the losses created by market failures such as moral hazard or adverse selection.	sam	1	11.08	20.3	0	14.69	22.1	12.67	16.5	19.02
Social overhead capital	The essen-tial investments on which eco-nomic development depends, particularly for sanitation and drinking water, transportation, and communications; sometimes called infrastructure.	sam	1	-50.35	25.3	0	28.25	27.2	15.68	19	22
Social regulation	See regulation.	sam	1	-49	20.6	0	7.1	12.5	11.63	1	20.8
Socialism	A political theory which holds that all @or almost all@ the means of production, other than labor, should be owned by the community. This allows the return on capital to be shared more equally than under capitalism.	sam	1	44.24	11.7	0	9.86	10.6	9.25	12.25	12.81
Speculator	Someone engaged in speculation, i.e., someone who buys nancial ting from later selling @or buying@ the item at a higher @or lower@ price.	sam	1	31.21	14.6	0	9.75	13.6	13.02	12.5	10.94
Spillovers	Same as externalities.	sam	1	-24.64	17.4	0	11.15	11.5	9.05	1.5	14.53
Stagflation	A term, coined in the early 1970s, describing the coex-istence of high unemployment, or stag nation, with persistent in ation . Its explanation lies pri-marily in the inertial nature of the ationary process.	sam	1	21.4	14.3	0	12.7	12.3	13.31	11.75	13.9
Statistical discrimination	Treatment of individuals on the basis of the average behavior or characteristics of members of the group to which they belong. Statistical discrimina- lling by reduc-ing incentives for individuals to overcome the stereotype.	sam	1	20.89	14.4	0	15.48	14.2	11.63	12.75	15.08
Stock, common	Refer to common stock.	sam	1	50.5	7.2	0	2.9	2.9	11.73	1	1.6
Stock market	An organized market-place in which common stocks are traded. In the United States, the largest stock market is the New York Stock Exchange, on which are traded the stocks of the largest U.S. companies.	sam	1	62.68	8.7	0	9.92	10.3	8.66	9	9.15
Stock vs flow	See flow vs. stock.	sam	1	118.18	-2.3	0	-2.91	-0.7	7.78	1	1.6
Strategic interaction	A situation in oligopolistic markets in which rm’s business strategies depend upon its rival’s plans. A formal analysis of strategic interac-tion is given in game theory.	sam	1	41.36	10.7	0	13.5	11.4	12.18	7.5	11.35
Structural budget	See actual, cyclical, and structural budget.	sam	1	-53.06	22.2	0	13.97	12.2	14.46	3	9.07
Structural unemployment	Unem-ployment resulting because the regional or occupational pattern of job vacancies does not match the pattern of worker availability. There may be jobs available, but unemployed workers may not have the required skill or the jobs may be in different regions from where the unemployed workers live.	sam	1	30.7	14.8	0	13.87	15.8	9.84	16.25	14.51
Subsidy	A payment by a government rm or household that pro-vides or consumes a commodity. For example, governments often subsidize food by paying for part of the food expenditures of low-income households.	sam	1	30.36	12.9	0	12.76	11.7	10.52	11.25	12.65
Substitutes	Goods that compete with each other @as do gloves and mittens@. By contrast, goods that go together in the eyes of consum-ers @such as left shoes and right shoes@ are complements.	sam	1	64.2	8.2	0	8.64	8.8	8.99	7.75	7.49
Substitution effect	@of a price change@. The tendency of consumers to consume more of a good when its relative price falls @to “sub-stitute” in favor of that good@ and to consume less of the good when its relative price increases @to “substitute” away from that good@. This substitution effect of a price change leads to a downward-sloping demand curve. @Compare with income effect. @	sam	1	48.98	14	0	10.8	17.2	9.03	13	15.48
Substitution rule	A rule which asserts that if the price of one factor falls while all other factor prices remain t by sub-stituting the now-cheaper factor for all the other factors. The rule is a corollary of the least-cost rule. Supply curve @ or supply schedule@. A schedule showing the quantity of a good that suppliers in a given market desire to sell at each price, holding other things equal.	sam	1	20.55	18.7	0	9.64	17.4	9.3	8.25	15.19
Supply shock	In macroeconomics, a sudden change in production costs or productivity that has a large and unexpected impact upon aggre-gate supply. As a result of a sup-ply shock, real GDP and the price level change unexpectedly.	sam	1	28.33	13.7	0	11.42	11.7	10.37	11.75	12.71
Supply-shock inflation	Ination origi-nating on the supply side of markets from a sharp increase in costs. In the aggregate supply-and-demand framework, cost-push is illustrated as an upward shift of the AS curve. Also called ation.	sam	1	34.93	11.1	9.7	11.06	9.2	10.88	5.833333	6.82
Supply-side economies	A view emphasizing policy measures to affect aggregate supply or poten-tial output. This approach holds that high marginal tax rates on labor and capital incomes reduce work effort and saving. T	sam	1	30.36	12.9	0	12.53	11.2	14.08	10.75	11.36
Tangible assets	Those assets, such as land or capital goods like comput-ers, buildings, and automobiles, that are used to produce further goods and services.	sam	1	32.22	14.2	0	12.76	15.2	9.75	14	10.62
Tariff	A levy or tax imposed upon each unit of a commodity imported into a country.	sam	1	56.25	9.1	0	5.73	5.5	9.64	8.5	11.33
Tax incidence	See incidence.	sam	1	-6.7	14.7	0	4.2	10.2	11.63	1	20.8
Technological change	A change in the process of production or an introduction of a new product such that more or improved out-put can be obtained from the same bundle of inputs. It results in an outward shift in the production-possibility curve. Often called tech-nological progress.	sam	1	56.96	8.9	9.7	11.01	9.9	9.49	7.5	9.44
Technological progress	See techno-logical change.	sam	1	-24.64	17.4	0	16.95	17.8	14.31	1.5	14.53
Terms of trade	@in international trade@ . The “real” terms at which a nation sells its export products and buys its import products. This measure equals the ratio of an index of export prices to an index of import prices. Theory of income distribution. A theory explaining the manner in which personal income and wealth are distributed in a society.	sam	1	26.14	16.6	0	11.09	15.9	10.38	6.3	16.2
Time deposit	Funds, held in a bank, that have a minimum “time of with-drawal”; included in broad money but not in M 1 because they are not accepted as a means of payment. Similar to savings deposits.	sam	1	45.25	11.3	0	6.61	7.8	8.56	10.75	11.57

Monopsony

The mirror image of monopoly: a market in which there is a single buyer; a “buyer’s monopoly.” Moral hazard. A type of market failure in which the presence of insurance against an insured risk increases the likelihood that the risky event will occur. For example, a car owner insured 100 percent against auto theft may be careless about locking the car because the presence of insurance reduces the incentive to prevent the theft. MPC . See marginal propensity to consume. MPS . See marginal propensity to save.

sam

1

2.96

23.4

0

11.85

23.4

11.32

10.9

20.76

Multiplier

A term in macroeconom-ics denoting the change in an induced variable @such as GDP or money supply@ per unit of change in an external variable @such as government spending or bank reserves@. The expenditure multiplier denotes the increase in GDP that would result from a $1 increase in expenditure @say, on investment@.

sam

1

36.63

14.6

0

11.55

15.7

10.7

17

14.25

Nash equilibrium

In game theory, a set of strategies for the players where no player can improve his or her payoff given the other play-er’s strategy. That is, given player A’s strategy, player B can do no better, and given B’s strategy, A can do no better. The Nash equi-librium is also sometimes called the noncooperative equilibrium.

sam

1

35.98

12.8

11.9

9.63

10.4

8.85

11.5

10.96

National debt

Same as government debt.

sam

1

50.5

7.2

0

5.8

5.3

7.78

2

1.6

National income and product accounts

@NIPA@. A set of accounts that measures the spending, income, and output of the entire nation for a quarter or a year. National saving rate. Total saving, private and public, divided by net domestic product.

sam

1

-6.36

22.8

0

10.34

19.3

11.69

5.833333

17.43

Natural monopoly

A firm or industry whose average cost per unit of production falls sharply over the entire range of its output, as, e.g., in local electricity distribution.

sam

1

45.09

13.4

0

10.91

15.3

14.04

18

16.55

Natural rate of unemployment

The same concept as the nonacceler- ation rate of unemploy-ment @

sam

1

44.41

9.6

0

11.4

9.5

12.03

6.5

12

Net domestic product NDP

GDP less an allowance for depreciation of capital goods.

sam

1

45.42

9.2

0

11.22

8.2

9.35

5.5

8.04

Net exports

In the national product accounts, the value of exports of goods and services minus the value of imports of goods and services.

sam

1

40.69

13.1

0

9.86

12

9.75

12

10.62

Net foreign investment

Net saving by a country abroad; approxi-mately equal to net exports. Net investment. Gross investment minus depreciation of capital goods.

sam

1

-8.05

19.3

0

15.78

16.6

11.73

6.5

12

Net worth

In accounting, total assets minus total liabilities. New classical macroeconomics. A theory which holds that @1@ prices exible and @2@ peo-ple make forecasts in accordance with the rational-expectations hypothesis.

sam

1

-42.57

26.4

0

18.52

23.3

15.96

6.833333

25.39

Nonaccelerating inflation rate of unemployment

An unem- ployment rate that is consistent with a constant infl ation rate. At the NAIRU, upward and downward forces on price and wage infl ation are in balance, so there is no ten- dency for infl ation to change. The NAIRU is the unemployment rate at which the long-run Phillips curve is vertical.

sam

1

70.13

8

8.8

7.77

8.9

8.92

9

9.42

Phillips curve

A graph, fi rst devised by A. W. Phillips, showing the tradeoff between unemployment and infl ation. In modern main- stream macroeconomics, the downward-sloping “tradeoff” Phil- lips curve is generally held to be valid only in the short run; in the long run, the Phillips curve is usu- ally thought to be vertical at the nonaccelerating infl ation rate of unemployment (NAIRU).

sam

1

50.46

11.4

12.5

10.85

12.9

11.03

13

11.51

Noncooperative equilibrium

See Nash equillibrium

sam

1

9.21

12.7

0

11.15

9.9

14.31

1.5

14.53

Nonrenewable resources

Those natural resources, like oil and gas, that are essentially fi xed in sup- ply and whose regeneration is not quick enough to be economically relevant.

sam

1

36.63

14.6

0

10.91

14.9

11

18

18.09

Not in the labor force

That part of the adult population that is neither working nor looking for work. O

sam

1

47.79

10.3

0

7.65

7.1

9.64

7.5

8.67

Okun’s Law

The empirical relation-ship, discovered by Arthur Okun, between cyclical movements in GDP and unemployment. The law states that when actual GDP declines 2 percent relative to potential GDP, the unemployment rate increases by about 1 per-centage point. @Earlier estimates placed the ratio at 3 to 1.@

sam

1

31.21

14.6

0

13.76

16.1

13.02

17.5

18.77

Oligopoly

A situation of imperfect competition in which an industry is dominated by a small number of suppliers. Open economy. An economy that engages in international trade @i.e., imports and exports@ of goods and capital with other coun-tries. A closed economy is one that has no imports or exports.

sam

1

13.28

17.4

0

11.32

14.5

9.76

11.666667

16.27

Open-market operations

The activity of a central bank in buying or u-ence bank reserves, the money supply, and interest rates. If secu-rities are bought, the money paid out by the central bank increases commercial-bank reserves, and the money supply increases. If securities are sold, the money sup-ply contracts.

sam

1

39.03

11.6

11.9

11.53

11.3

10.23

9

10.47

Opportunity cost

The value of the best alternative use of an economic good. Thus, say that the best alter-native use of the inputs employed to mine a ton of coal was to grow 10 bushels of wheat. The oppor-tunity cost of a ton of coal is thus the 10 bushels of wheat that could have been produced but were not.

sam

1

77.27

7.3

9.7

5.63

7.3

7.86

11

9.79

Ordinal utility

A dimensionless util-ity measure used in demand the-ory.

sam

1

21.06

12.3

0

13.7

11.4

13.9

6

8.2

Outputs

The various useful goods or services that are either consumed or used in further production. P Paradox of thrift. The principle, rst proposed by John Maynard Keynes, that an attempt by a soci-ety to increase its saving may result in a reduction in the amount which it actually saves. Paradox of value. The paradox that many necessities of life @e.g., water@ have a low “market” value while many luxuries @e.g., dia-monds@ with little “use” value have a high market price. It is explained ects not the total utility of a commodity but its marginal utility.

sam

1

6.34

24.2

0

10.52

25.2

11.64

10.083333

23.21

Pareto efficiency or Pareto optimality

A situation in which no reor-ganization or trade could raise the utility or satisfaction of one indi-vidual without lowering the utility or satisfaction of another individ-ual. Under certain limited condi-tions, perfect competition leads ciency. Also called allocative ef ciency. Partial-equilibrium analysis. Analy-sis concentrating on the effect of changes in an individual market, holding other things equal @e.g., disregarding changes in income@.

sam

1

-16.82

20.6

17.9

18.1

18.8

13.19

12.625

17.96

Partnership

An association of two or more persons to conduct a business which is not in corporate form and does not enjoy limited liability.

sam

1

39.67

13.4

0

9.52

11.8

8.9

15.5

16.16

Patent

An exclusive right granted to an inventor to control the use of an invention for, in the United States, a period of 20 years.

sam

1

55.58

11.5

0

6.97

10.6

10.09

16

16.27

Payoff table

In game theory, a table used to describe the strategies and payoffs of a game with two or ts or utili-ties of the different players are the payoffs.

sam

1

34.6

15.4

0

7.43

12.9

8.97

17

12.63

Payoffs

See payoff table.

sam

1

34.59

9.2

0

1.52

3.6

9.05

0.5

1.2

Policy-ineffectiveness

A theorem which asserts that, with ex-ible prices and wages, anticipated government monetar scal policy cannot affect real output or unemployment. Portfolio theory. An economic theory that describes how ratio-nal investors allocate their wealth nancial assets—that is, how they put their wealth into a “portfolio.” Positive economics. See normative vs. positive economics.

sam

1

-48.99

33

0

18.18

33.6

14.41

15.333333

30.03

Post hoc fallacy

From the Latin, post hoc, ergo propter hoc, which translates as “after this, therefore because of this.” This fallacy arises when it is assumed that because event A precedes event B, it follows that A causes B. Potential GDP. High-employment GDP; more precisely, the maxi-mum level of GDP that can be sustained with a given state of tech-nology and population size without ation. Today, it is generally taken to be equivalent to the level of output corresponding to the ation rate of unemployment

sam

1

20.89

20.7

0

11.51

22.8

11.4

17.5

21.42

Potential output

is not necessarily maximum output.

sam

1

-1.29

14.7

0

11.92

9.3

13.36

3.5

18

Poverty

Today, the U.S. government nes the “poverty line” to be the minimum adequate standard of living. PPF. See production-possibility fron-tier. Present value @of an asset@. Today’s value for an asset that yields a stream of income over time. Val-uation of such time streams of returns requires calculating the present worth of each component of the income, which is done by applying a discount rate @or inter-est rate@ to future incomes.

sam

1

10.57

20.5

0

11.96

20.6

11.69

7.8

18

Price

The money cost of a good, service, or asset.

sam

1

79.26

4.4

0

2.23

1.9

5.84

3.5

3.6

Private good

See public good. Producer price index. The price index of goods sold at the whole-sale level @such as steel, wheat, oil@. Producer surplus. The difference between the producer sales rev-enue and the producer cost. The producer surplus is generally mea-sured as the area above the supply curve but under the price line up to the amount sold.

sam

1

25.63

16.8

0

10.57

16.3

8.1

6.1

12.8

Product, average

Refer to average product.

sam

1

8.2

13.1

0

7.25

6.5

15.68

2

11.6

Product, marginal

Refer to marginal product. Product differentiation. The exis-tence of characteristics that make similar goods less-than-perfect substitutes. Thus locational dif-ferences make similar types of gasoline sold at separate points imperfect substitutes.

sam

1

-19.9

19.8

0

22.73

20.3

13.33

8

15.33

Production function

A relation @or mathematical function@ specifying the maximum output that can be produced with given inputs for a given level of technology; applies rm or, as an aggregate pro-duction function, to the economy as a whole.

sam

1

1.1

22.1

0

11.85

20.6

12

26

22.18

Production-possibility frontier

PPF @. A graph showing the menu of goods that can be produced by an economy. In a frequently cited case, the choice is reduced to two goods, guns and butter. Points out-side the PPF @to the northeast of it@ are unattainable. Points inside cient since resources are not being fully employed, resources are not being used prop-erly, or outdated production tech-niques are being utilized.

sam

1

46.78

10.7

9.5

10.15

10.2

10.1

8.375

8.9

Productive efficiency

A situation in which an economy cannot pro-duce more of one good without producing less of another good; this implies that the economy is on its production-possibility frontier.

sam

1

26.14

16.6

0

13.23

17.8

10.1

20

18.34

Productivity

A term referring to the ratio of output to inputs @total out-put divided by labor inputs is labor productivity @.

sam

1

26.81

14.2

0

10.21

11.4

11.23

13

13.92

Progressive, proportional, and regresive taxes

A progressive tax weighs more heavily upon the rich; a regressive tax does the opposite. More precisely, a tax is progressive if the average tax rate (i.e., taxes divided by income) is higher for those with higher incomes; it is a regressive tax if the average tax rate declines with higher incomes; it is a proportional tax if the average tax rate is equal at all income levels.

sam

1

45.43

15.4

0

9.01

17.2

8.81

23

18.31

Property rights

Rights that define the ability of individuals or firms to own, buy, sell, and use the capital goods and other property in a market economy.

sam

1

37.64

14.2

0

8.77

12.7

9.3

17.5

16.4

Proportional tax

See progressive, proportional, and regressive taxes. Proprietorship, individual. A busi- rm owned and operated by one person.

sam

1

-55.77

25.3

0

17.22

17.3

13.77

6.25

20.92

Protectionism

Any policy adopted by a country to protect domestic industries against competition from imports @most commonly, a tariff or quota imposed on such imports@. Public choice @ also public-choice theory@. Branch of economics and political science dealing with the way that governments make choices and direct the economy. This theory differs from the the-ory of markets in emphasizing uence of vote maximizing for politicians, which contrasts to rms.

sam

1

3.63

21.1

0

14.98

21.9

11.66

12.25

20.56

Public debt

See government debt. Public good. A commodity whose ts are indivisibly spread among the entire community, whether or not particular individ-uals desire to consume the public good. For example, a public-health measure that eradicates polio pro-tects all, not just those paying for the vaccinations. To be contrasted with private goods, such as bread, which, if consumed by one person, cannot be consumed by another person. Pure economic rent. See rent, economic. Q

sam

1

4.82

18.6

15

13.12

16.2

9.87

7.166667

15.16

Quantity demanded

See change in demand vs. change in quantity demanded.

sam

1

53.88

8

0

8.67

6.6

11.1

5.5

12.49

Quantity equation of exchange

A tau-tology, MV PQ , where M is the money supply, V is the income veloc-ity of money, and PQ @price times quantity@ is the money value of total output @nominal

sam

1

7.19

19.7

0

6.69

14

12.49

19.5

16

Quantity theory of money and prices

A theory of the determination of output and the overall price level holding that prices move propor-tionately with the money supply. A more cautious approach put forth by monetarists holds that the money supply is the most impor-tant determinant of changes in nominal GDP @see monetarism @.

sam

1

39.67

13.4

0

13

15

11.64

15.75

15.29

Quota

A form of import protection-ism in which the total quantity of imports of a particular commodity @e.g., sugar or cars@ during a given period is limited. R

sam

1

1.77

19.7

0

9

14.4

13.16

19.5

19.69

Random-walk theory

@of stock market prices@. See efficient market.

sam

1

30.53

10.7

0

10.74

9.7

8.5

1.25

8.51

Rate of inflation

See infation.

sam

1

-49

20.6

0

1.3

7.8

11.63

1

20.8

Rate of return or return on capital

The yield on an investment or on a capital good. Thus, an investment costing $100 and yield-ing $12 annually has a rate of return of 12 percent per year.

sam

1

56.76

8.9

0

5.91

6.1

9.8

8.25

8.56

Rate of return on investment

The net dollar return per year for every dollar of invested capital. For example, if $100 of invest-ment yields $12 per year of return, the rate of return on investment is 12 percent per year. Rational expectations. See expec-tations. Rational-expectations hypothesis. A hypothesis which holds that peo-ple make unbiased forecasts and, further, that people use all avail-able information and economic theory to make these forecasts.

sam

1

-3.82

21.9

0

14.63

21.5

11.08

15.833333

19.15

Rational-expectations macroeconomics

A school holding that markets clear quickly and that expecta-tions are rational. Under these and other conditions it can be shown that predictable macro-economic policies have no effect on real output or unemployment. Sometimes called new classical macroeconomics.

sam

1

41.66

10.6

11.9

15.7

13

11.33

7.666667

12.45

Real-business-cycle RBC theory

A theory that explains business cycles purely as shifts in aggregate supply, primarily due to techno-logical disturbances, without any reference to monetary or other demand-side forces.

sam

1

-5.68

20.5

0

17.58

20.5

14.04

21

21.17

Real interest rate

The interest rate measured in terms of goods rather than money. It is thus equal to the money @or nominal@ interest rate ation.

sam

1

76.72

5.4

0

7

5.8

8.33

6.25

8.08

Real wages

The purchasing power of a worker’s wages in terms of goods and services. It is measured by the ratio of the money wage rate to the consumer price index.

sam

1

82.14

5.4

0

6.55

6

9.8

6.75

7.18

Recession

A period of significant decline in total output, income, and employment, usually last-ing from 6 months to a year and marked by widespread contrac-tions in many sectors of the econ-omy. See also depression.

sam

1

29.35

13.3

0

11.6

13.07

11.75

12.66

Regressive tax

See progressive, pro-portional, and regressive taxes.

sam

1

-95.36

28.1

0

21.68

19.3

17.09

5

22.4

Regulation

Government laws or rules designed to control the behavior of rms. The major kinds are economic regulation @which affects the prices, entry, or service of a single indus-try, such as telephone service@ and social regulation @which attempts to correct externalities that prevail across a number of industries, such as air or water pollution@. Renewable resources. Natural re-sources @like agricultural land@ whose services replenish regularly and which, if properly managed, can yield useful ser nitely. sam11290_glo.indd 672sam11290_glo.indd 6722/24/09 2:58:33 PM2/24/09 2:58:33 PM 673

sam

1

-3.99

24

0

17.07

27.9

14.34

18.666667

23.23

Rent, economic

Term applied to income earned from land. The total sup-ply of land available is @with minor cations@ xed, and the return paid to the landowner is rent. The term is often extended to the return paid to any factor xed supply—i.e., to any input having a perfectly inelastic or ver-tical supply curve.

sam

1

53.92

10

9.7

8.64

9.5

10.26

9

9.23

Required reserve ratio

That portion of deposits that a bank sets aside in the form of vault cash or non-interest-earning deposits with Fed-eral Reserve Banks. In the United States, banks are required to hold 10 percent of checking deposits @or transactions accounts@ in the form of reserves.

sam

1

57.61

10.7

0

11.31

13.6

10.83

12.5

10.62

Resource allocation

The manner in which an economy distributes its resources @its factors of production@ among the potential uses so as to produce a particular set of nal goods.

sam

1

44.07

13.8

0

10.51

14.9

11.41

18.5

18.21

Returns to scale

The rate at which output increases when all inputs are increased proportionately. For example, if all the inputs double and output is exactly doubled, that process is said to exhibit constant returns to scale. If, however, output grows by less than 100 percent when all inputs are doubled, the process shows decreasing returns to scale; if output more than doubles, the process demonstrates increas-ing returns to scale.

sam

1

29.01

17.5

0

13.01

20.2

10.48

13.833333

16.98

Ricardian view of fiscal policy

A theory developed by Harvard’s Robert Barro which holds that changes in tax rates have no impact upon consumption spending because households foresee, say, that tax cuts today will require tax increases nance the govern-ment’ financing requirements.

sam

1

17

20.1

0

16.26

24.3

14.01

25.5

21.29

Risk

Financial economics, refers to the variability of the returns on an investment.

sam

1

0.08

16.2

0

13.73

11.3

12.13

9

18.13

Saving function

The schedule show-ing the amount of saving that households or a nation will under-take at each level of income.

sam

1

60.65

9.5

0

10.21

11.1

8.73

10.5

7.6

Scarcity

The distinguishing charac-teristic of an economic good. That an economic good is scarce means not that it is rare but only that it is not freely available for the taking. To obtain such a good, one must either produce it or offer other economic goods in exchange.

sam

1

55.54

9.4

10.5

8.58

8.2

7.77

8.5

8.83

Schedule

@demand, supply, aggre-gate demand, aggregate supply@. Term used interchangeably with “curve,” as in demand curve, sup-ply curve, etc.

sam

1

28.5

11.5

0

14.76

13.7

11.1

5

8.04

Securities

A term used to designate nancial assets, such as stocks, bonds, options, and notes; more precisely, the docu-ments used to establish ownership of these assets.

sam

1

29.18

15.4

0

12.48

16.5

12.46

17.5

16.4

Short run

A period in which not all factors can adjust fully. In micro-economics, the capital stock and xed” inputs cannot be adjusted and entry is not free in the short run. In macroeconom-ics, prices, wage contracts, tax rates, and expectations may not fully adjust in the short run. Short-run aggregate supply sched-ule. The schedule showing the relationship between output and prices in the short run wherein changes in aggregate demand can affect output; represented by an upward-sloping or horizontal AS curve.

sam

1

27.45

16.1

14.6

12.83

17.1

11.08

10.4

14.68

Shutdown price

In the theory of the firm, the shut-down point comes at that point where the market price is just sufficient to cover average variable cost and no more. Hence, the firm’s losses per period just equal its fixed costs; it might as well shut down.

sam

1

65.56

9.7

0

8.01

10.7

9.31

13.25

12.56

Single-tax movement

A nineteenth-century movement, originated by Henry George, holding that continued poverty in the midst of steady economic progress was attributable to the scarcity of land owing to land-owners. The “single tax” was to be a tax on economic rent earned from landownership.

sam

1

33.24

13.8

0

13.52

14.7

11.45

14.5

14.11

Slope

In a graph, the change in the variable on the vertical axis per unit of change in the variable on the horizontal axis. Upward-sloping lines have positive slopes, downward-sloping curves @like demand curves@ have negative slopes, and horizontal lines have slopes of zero. Social insurance. Mandatory insur-ance provided by government to improve social welfare by prevent-ing the losses created by market failures such as moral hazard or adverse selection.

sam

1

11.08

20.3

0

14.69

22.1

12.67

16.5

19.02

Social overhead capital

The essen-tial investments on which eco-nomic development depends, particularly for sanitation and drinking water, transportation, and communications; sometimes called infrastructure.

sam

1

-50.35

25.3

0

28.25

27.2

15.68

19

22

Social regulation

See regulation.

sam

1

-49

20.6

0

7.1

12.5

11.63

1

20.8

Socialism

A political theory which holds that all @or almost all@ the means of production, other than labor, should be owned by the community. This allows the return on capital to be shared more equally than under capitalism.

sam

1

44.24

11.7

0

9.86

10.6

9.25

12.25

12.81

Speculator

Someone engaged in speculation, i.e., someone who buys nancial ting from later selling @or buying@ the item at a higher @or lower@ price.

sam

1

31.21

14.6

0

9.75

13.6

13.02

12.5

10.94

Spillovers

Same as externalities.

sam

1

-24.64

17.4

0

11.15

11.5

9.05

1.5

14.53

Stagflation

A term, coined in the early 1970s, describing the coex-istence of high unemployment, or stag nation, with persistent in ation . Its explanation lies pri-marily in the inertial nature of the ationary process.

sam

1

21.4

14.3

0

12.7

12.3

13.31

11.75

13.9

Statistical discrimination

Treatment of individuals on the basis of the average behavior or characteristics of members of the group to which they belong. Statistical discrimina- lling by reduc-ing incentives for individuals to overcome the stereotype.

sam

1

20.89

14.4

0

15.48

14.2

11.63

12.75

15.08

Stock, common

Refer to common stock.

sam

1

50.5

7.2

0

2.9

11.73

1

1.6

Stock market

An organized market-place in which common stocks are traded. In the United States, the largest stock market is the New York Stock Exchange, on which are traded the stocks of the largest U.S. companies.

sam

1

62.68

8.7

0

9.92

10.3

8.66

9

9.15

Stock vs flow

See flow vs. stock.

sam

1

118.18

-2.3

0

-2.91

-0.7

7.78

1

1.6

Strategic interaction

A situation in oligopolistic markets in which rm’s business strategies depend upon its rival’s plans. A formal analysis of strategic interac-tion is given in game theory.

sam

1

41.36

10.7

0

13.5

11.4

12.18

7.5

11.35

Structural budget

See actual, cyclical, and structural budget.

sam

1

-53.06

22.2

0

13.97

12.2

14.46

3

9.07

Structural unemployment

Unem-ployment resulting because the regional or occupational pattern of job vacancies does not match the pattern of worker availability. There may be jobs available, but unemployed workers may not have the required skill or the jobs may be in different regions from where the unemployed workers live.

sam

1

30.7

14.8

0

13.87

15.8

9.84

16.25

14.51

Subsidy

A payment by a government rm or household that pro-vides or consumes a commodity. For example, governments often subsidize food by paying for part of the food expenditures of low-income households.

sam

1

30.36

12.9

0

12.76

11.7

10.52

11.25

12.65

Substitutes

Goods that compete with each other @as do gloves and mittens@. By contrast, goods that go together in the eyes of consum-ers @such as left shoes and right shoes@ are complements.

sam

1

64.2

8.2

0

8.64

8.8

8.99

7.75

7.49

Substitution effect

@of a price change@. The tendency of consumers to consume more of a good when its relative price falls @to “sub-stitute” in favor of that good@ and to consume less of the good when its relative price increases @to “substitute” away from that good@. This substitution effect of a price change leads to a downward-sloping demand curve. @Compare with income effect. @

sam

1

48.98

14

0

10.8

17.2

9.03

13

15.48

Substitution rule

A rule which asserts that if the price of one factor falls while all other factor prices remain t by sub-stituting the now-cheaper factor for all the other factors. The rule is a corollary of the least-cost rule. Supply curve @ or supply schedule@. A schedule showing the quantity of a good that suppliers in a given market desire to sell at each price, holding other things equal.

sam

1

20.55

18.7

0

9.64

17.4

9.3

8.25

15.19

Supply shock

In macroeconomics, a sudden change in production costs or productivity that has a large and unexpected impact upon aggre-gate supply. As a result of a sup-ply shock, real GDP and the price level change unexpectedly.

sam

1

28.33

13.7

0

11.42

11.7

10.37

11.75

12.71

Supply-shock inflation

Ination origi-nating on the supply side of markets from a sharp increase in costs. In the aggregate supply-and-demand framework, cost-push is illustrated as an upward shift of the AS curve. Also called ation.

sam

1

34.93

11.1

9.7

11.06

9.2

10.88

5.833333

6.82

Supply-side economies

A view emphasizing policy measures to affect aggregate supply or poten-tial output. This approach holds that high marginal tax rates on labor and capital incomes reduce work effort and saving. T

sam

1

30.36

12.9

0

12.53

11.2

14.08

10.75

11.36

Tangible assets

Those assets, such as land or capital goods like comput-ers, buildings, and automobiles, that are used to produce further goods and services.

sam

1

32.22

14.2

0

12.76

15.2

9.75

14

10.62

Tariff

A levy or tax imposed upon each unit of a commodity imported into a country.

sam

1

56.25

9.1

0

5.73

5.5

9.64

8.5

11.33

Tax incidence

See incidence.

sam

1

-6.7

14.7

0

4.2

10.2

11.63

1

20.8

Technological change

A change in the process of production or an introduction of a new product such that more or improved out-put can be obtained from the same bundle of inputs. It results in an outward shift in the production-possibility curve. Often called tech-nological progress.

sam

1

56.96

8.9

9.7

11.01

9.9

9.49

7.5

9.44

Technological progress

See techno-logical change.

sam

1

-24.64

17.4

0

16.95

17.8

14.31

1.5

14.53

Terms of trade

@in international trade@ . The “real” terms at which a nation sells its export products and buys its import products. This measure equals the ratio of an index of export prices to an index of import prices. Theory of income distribution. A theory explaining the manner in which personal income and wealth are distributed in a society.

sam

1

26.14

16.6

0

11.09

15.9

10.38

6.3

16.2

Time deposit

Funds, held in a bank, that have a minimum “time of with-drawal”; included in broad money but not in M 1 because they are not accepted as a means of payment. Similar to savings deposits.

sam

1

45.25

11.3

0

6.61

7.8

8.56

10.75

11.57