Economics Glossary

The ability of a country or entity to produce a good using fewer resources than another country or entity.

The total quantity of goods and services that producers in an economy are willing and able to supply at a given overall price level.

A comprehensive record of all economic transactions between the residents of a country and the rest of the world during a given period.

The recurring pattern of expansion, peak, contraction, and trough in economic activity over time.

Man-made resources such as machinery, tools, buildings, and equipment used in the production of goods and services.

A national institution responsible for managing a country's monetary policy, issuing currency, and regulating the banking system.

The ability of a country or individual to produce a good or service at a lower opportunity cost than another.

A statistical measure that tracks the average change in prices paid by urban consumers for a representative basket of goods and services over time.

The loss of total economic surplus that results when the market equilibrium is distorted by taxes, subsidies, price controls, or monopoly power.

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing to purchase.

A decrease in the value of a currency relative to other currencies, or a decline in the value of a capital asset over time due to wear and obsolescence.

The principle that adding more of one input to production while holding other inputs constant will eventually yield progressively smaller increases in output.

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in no surplus or shortage.

The rate at which one country's currency can be exchanged for another country's currency in foreign exchange markets.

A cost or benefit of an economic activity that affects third parties who are not directly involved in the transaction.

International trade that occurs without government-imposed barriers such as tariffs, quotas, or subsidies.

The total monetary value of all final goods and services produced within a country's borders during a specific time period.

A sustained increase in the general price level of goods and services in an economy over a period of time, reducing purchasing power.

The additional satisfaction or benefit a consumer derives from consuming one more unit of a good or service.

A market structure in which a single seller controls the entire supply of a good or service with no close substitutes and significant barriers to entry.

The value of the best alternative forgone when a particular choice is made.

A measure of how responsive the quantity demanded of a good is to a change in its price, calculated as $E_d = \frac{\%\Delta Q_d}{\%\Delta P}$.

A good that is non-excludable and non-rivalrous, meaning it is available to all and one person's consumption does not reduce its availability to others.

A financial assistance payment made by the government to businesses or individuals to encourage the production or consumption of a particular good or service.

A tax imposed by a government on imported goods or services, designed to raise revenue or protect domestic industries from foreign competition.