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Some terms commonly used in Economics:
Arbitration: An industrial dispute is considered by an independent organization which makes its decision. The two sides in dispute often agree in advance to be bound by the decision.
Assisted Area: An area of a country in which firms can receive financial help.
Automation: Mass production using a large amount of machines relative to labour.
Average Cost: The cost of producing each unit of output, Total cost divided by the total output.
Average Revenue: The revenue received from the sale of each unit of output. Total revenue divided by total output. Average Revenue is same as the price.
Balance of Invisibles (Intangible goods): The different between the value of invisible exports and invisible imports.
Balance of payment: A record of a country’s monetary transactions with the rest of the world over a period of time.
Balance of payment current Account: A record of all the receipts from visible (Tangible goods) and invisible (Intangible goods) exports and payments for visible and invisible imports.
Balance of payment deficit: This occurs when the amount paid to other countries is greater than the amount received from them.
Balance of Payment surplus: This occurs when receipts are greater than payments.
Bank: A business which takes deposits from savers and makes loans to borrowers.
Barter: Swopping commodities directly without the use of money.
Birth rate: The number of births per thousand of the population per year.
Boom: A period of high economic activity and employment.
Break-even: Total costs equal total revenue.
Budget: An estimate of the government’s revenue from various sources to meet its expenditure.
Building society: A financial institution which accepts deposits from savers and makes loans to borrowers, particularly mortgage loans.
Capital: A man-made resource used to produce goods and services. (One of the four factors of production)
Cash: Bank notes and coins.
Centrally planned economy: An economy where resources are allocated by the state. The planners decided what to produce, how to produce and the system of output allocation.
Cheque: A means of transferring a bank deposits from one person to another.
Cheque Card: This guarantees payment of the amount of money written on the cheque up to a certain value.
Closed ship: A system whereby only members of a given trade union or unions are allowed to work in a particular place of employment.
Collective Bargaining: The work force as a whole negotiates on pay and working conditions through its representatives.
Comparative Advantage: This exists where there is low opportunity cost of producing a commodity compared with other producers.
Complements: Jointly consumed commodities, e.g. Compact discs and compact disc players.
Conglomerate: A firm which makes a variety of commodities.
Consumer: A person who used goods and services.
Corporation Tax: A tax on company profits.
Cost-push Inflation: A rise in prices brought about by a rise in costs of production.
Cost of production: The cost of producing a given quantity of output.
Credit: Buying goods and services but paying for them later.
Credit card: A method of purchase. The retailer is paid by the credit card Company, the card holder then owes that sum of money to the credit company.
Current Account: A bank account which provides various services including cheques.
Custom Duties: Taxes on imports.
Customs Union: A group of countries which abolishes tariffs and quotas amongst themselves and which equalizes its import controls against other countries.
Death Rate: The number of deaths per thousand of the population a year.
Debenture: A long-term, fixed interest loan to a company.
Demand: The amount bought at a given price of a certain period of time.
Demand curve: A line graph relative price per unit to the quantity consumers will buy at that price.
Demand-pull inflation: A rise in prices brought about by a rise in demand greater than any rise in output.
Demarcation: A definition of a job and the particular worker qualified for it by a trade union.
Dependency ratio: The ratio non-working population to working population.
Depreciation: The gradual loss of value of capital or other asses such as a car. Depreciation is considered to be a fixed cost of production.
Derived demand: The demand is determined by the demand for another commodity, e.g. the demand for steel plate is determined by the demand for cars, etc.
Devaluation: A fall in the exchange rate, i.e. the value of currency falls against other countries.
Developed Countries: Rich countries; countries with relatively high levels of economic activity and living standards.
Developing countries: Poor countries; countries with relatively low levels of economic activity and living standards.
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