Economics Definition

Resources
What goods and services are produced from, such as raw materials, labour, machinery. There are four different resource categories, land, labour, capital and enterprise
Needs
Goods or services that are essential for life
Wants
Non-essential goods and services
Economics
The branch of knowledge concerned with the production, consumption and transfer of wealth or simply the study of how we choose to use scarce resources in order to satisfy our wants
Opportunity Cost
Cost involved in choosing an economic activity instead of its next best alternative.
Ecological Sustainability
An ability to sustain the natural balance between living things and their environment
We will write a custom essay sample on
Any topic specifically for you
For only $13.90/page
Order Now
Inflation
Price rises
Standard of living
The quality of life measured by the amount of goods and services an individual has available for consumption; a measure of the level of material comfort of a populations, in terms of goods and services available, poverty rate and average income
Macroeconomics
The study of the economy as a whole and the issues that influence it.
Microeconomics
The study of an economies separate parts
Economic growth
Growth of an economy as measured by recognized factors such as the total value of goods and services produced in a given time (Gross Domestic Product)
GDP
GDP is the total value (expressed in dollars) of all goods and services produced across a nation in a given year.
Recession
A downturn in an economy that follows two or more quarters of negative growth; usually less severe than a depression.
Sustainable Economic Growth:
Economic growth that does not cause any long-term damage to the environment or other countries that focuses on more sustainable industries
Exploitation
The Act of taking advantage of a situation for personal gain.
Demand
The quantity of goods and services that consumers are willing to buy at a given price
Supply
A quantity of goods and services that producers are willing to sell at a given price.
Surplus
Amount by which revenue exceeds expenses (Profit); a situation in which there is too much of a good or service available compared with what consumers want to purchase
Shortage
A situation in which there is too little of a good or service available compared with what consumers want to purchase
Ethical Consumerism
Ethical consumerism is the intentional purchase of products and services that the customer considers to be made ethically
Disposable income
Income that remains available for spending after deductions for taxes and other obligations
Profit
excess of revenues (money received) over outlays (money spent)
Reserve Bank
the central bank of the nation
Cash Rate
the interest rate which financial institutions pay to borrow or charge to lend funds in the money market on an overnight basis
Interest rate
The percent that is charged, or paid for the use of money.
Deficit
Amount by which expenses exceed revenue (loss)
Taxation
A means by which governments finance their expenditure by imposing charges on citizens and corporate entities
Globalisation
the strengthening of economic ties between nations of the world, and the resulting investment and trade opportunities
Export
Goods or Services sold to overseas countries
Import
Purchase of foreing goods and services, the opposite of exports
Balance of Trade
the difference, over a fixed period, between the money gained by a country from its total exports and money it spends on total imports; where export income exceeds import payments there is a surplus in the balance of trade
Current Account Deficit
A current account deficit is when a country’s government, businesses and individuals imports more goods, services and capital than it exports
Terms of Trade
The weighted average of a country’s export PRICES relative to its import prices.
Currency
a system of money used in a country, or the notes and coins themselves
Exchange Rate
the rate at which one currency is exchanged for another
Free Trade
The ability of people to undertake economic transactions with people in other countries free from any restraints imposed by governments or other regulators
Tariffs
A tax or duty to be paid on a particular class of imports or exports.
Economies of scale
Reduction in cost per unit resulting from increased production, realized through operational efficiencies. Economies of scale can be accomplished because as production increases, the cost of producing each additional unit falls.
World Trade Organisation
The World Trade Organisation is the governing body of international trade, setting and enforcing the rules of trade and punishing offenders
Transnational Corporation
A business (Sometimes called a multinational corporation) that operates in more than one country, usually with branch offices outside its home country.
Intellectual Property
ideas created and owned by an individual or company
Market Economy
An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country’s citizens and businesses and there is little government intervention or central planning
Mixed Economy
An economic system in which both the government and the private sector play important roles with regard to production, consumption, investment, and savings.
Specialization
In economics, the term specialization refers to people, companies or countries focusing on providing a single good or service, instead of a range of different goods or goods and services in a particular area as opposed to a large one so that they can increase their efficiency and profit.
The economic problem
What to produce, how to produce it and for whom to produce it.