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250 Cards in this Set
- Front
- Back
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ability-to-pay principle
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The principle of tax fairness by which those with greater ability to pay a tax should pay more tax.
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absolute advantage
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The advantage conferred on an individual in an activity if he or she can do it better than other people.
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accelerator principle
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The proposition that a higher rate of growth in real GDP results in a higher level of investment spending, and a lower growth rate in real GDP leads to lower planned investment spending.
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accounting profit
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A business's revenue minus the explicit cost and depreciation.
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actual investment spending
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The sum of planned investment spending and unplanned inventory investment.
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AD-AS model
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The basic model used to understand fluctuations in aggregate output and the aggregate price level. It uses the aggregate supply curve and the aggregate demand curve together to analyze the behavior of the economy in response to shocks or government policy.
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administrative costs
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(of a tax): the resources used (which is a cost) by government to collect the tax, and by taxpayers to pay it, over and above the amount of the tax, as well as to evade it.
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adverse selection
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Occurs when an individual knows more about the way things are than other people do. Problems can lead to market problems: private information leads buyers to expect hidden problems in items offered for sale, leading to low prices and the best items being kept off the market.
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aggregate consumption function
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The relationship for the economy as a whole between aggregate current disposable income and aggregate consumer spending.
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aggregate demand curve
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A graphical representation that shows the relationship between the aggregate price level and the quantity of aggregate output demanded by households, firms, the government, and the rest of the world. Has a negative slope due to the wealth effect of a change in the aggregate price level and the interest rate effect of a change in the aggregate price level.
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aggregate output
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The total quantity of final goods and services the economy produces for a given time periods, usually a year. Real GDP is the numerical measurement of this typically used by economists.
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aggregate price level
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A single number that represents the overall price level for final goods and services in the economy
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Aggregate production function
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A hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology.
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aggregate spending
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The total flow of funds into markets for domestically produced final goods and services; the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports
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aggregate supply curve
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A graphical representation that shows the relationship between the aggregate price level and the total quantity of aggreagate output supplied.
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anti-trust policy
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Legislative and regulatory efforts undertaken by the government to prevent oligopolistic industries from becoming or behaving like monopolies
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appreciation
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A rise in the value of one currency in terms of other currencies.
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artificially scarce good
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A good that is excludable but nonrival in consumption
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autarky
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A situation in which a country does not trade with other countries
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automatic stabilizers
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Government spending and taxation rules that cause fiscal policy to be automatically expansionary when the economy contracts and automatically contractionary when the economy expands without requiring and deliberate actions by policy makers. Taxes that depend on disposable income are the most important example of these.
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autonomous change in aggregate spending
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An initial rise or fall in aggregate spending at a given level of real GDP.
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average cost/average total cost
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the total cost divided by the quantity of output.
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average fixed cost
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The fixed cost per unit of output.
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average variable cost
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The variable cost per unit of output.
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backward-bending indiviual labor supply curve
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An individual labor supply curve that slopes upward at low to moderate wage rates and slopes downward at higher wage rates.
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balance of payments accounts
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A summary of a country's transactions with other countries, including two main elements: the balance of payments on current account and the balance of payments on financial account.
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balance of payments on current account (current account)
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Transactions that don't create liabilities; a country's balance of payments on goods and services plus net international transfer payments and factor income.
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balance of payments on financial account (financial account)
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International transactions that involve the sale or purchase of assets, and therefore create future liabilities.
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balance of payments on goods and services
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The difference between the value of exports and the value of imports during a given period.
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balance sheet effects
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The reduction in a firm's net worth from fallin asset prices.
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bank
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A financial intermediary that provides liquid assets in the form of bank deposits of lenders and uses those funds to finance the illiquid investments or investment spending needs of borrowers.
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bank deposit
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A claim on a bank that obliges the bank to give the depositor his or her cash when demanded.
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bank reserves
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Currency held by banks in their vaults plus their deposits at the Federal reserve.
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bank run
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A phenomenon in which many of a bank's depositors try to withdraw their funds due to fears of a bank failure.
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barrier to entry
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Something that prevents other firms from entering an industry. Crucial in protecting the profits of a monopolist. There are four main types: control over scarce resources or inputs, increasing returns to scale, technological superiority, and government-created barriers such as licenses.
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barter
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A transaction in which people directly exchange goods or services they have for goods or services they want.
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benefits principle
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the principle of tax fairness by which those who benefit from public spending should bear the burden of the tax that pays for that spending.
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black market
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A market in which goods or services are bought and sold illegally, either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling.
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bond
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A legal document based on borrowing in the form of an IOU that pays interest.
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brand name
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A name owned by a particular firm that distinguishes its produts from those of other firms.
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break-even price
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The market price at which a firm earns zero profits.
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budget balance
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The difference between tax revenue and government spending. When positive, it is a budget surplus; when negative, it is a budget deficit.
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budget constraint
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The cost of a consumer's consumption bundle cannot exceed the consumer's income.
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budget deficit
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The difference between tax revenue and government spending when government spending exceeds tax revenue; dissaving by the government in this form is a negative contribution to national savings.
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budget line
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All the consumption bundles available to a consumer who spends all of his or her income.
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budget surplus
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The difference between tax revenue and government spending when tax revenue exceeds government spending; saving by the government in this form is a positive contribution to national savings.
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business cycle
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The short-run alternations between economic downturns (recessions or contractions) and economic upturns (growths/booms or expansions)
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business-cycle peak
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the point in time at which the economy shifts from expansion to recession.
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business-cycle trough
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The point in time at which the economy shifts from recession to expansion.
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capital
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The combined value of a business' assets; includes equipment, buildings, tools, inventory, and financial assets.
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captial at risk
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Funds than an insurer places at risk when providing insurance.
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capital inflow
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the net inflow of funds into a coutnry; the difference between the total inflow of foreign funds to the home country and the total outflow of domestic funds to other countries. When positive, represents funds borrowed from foreigners to finance domestic investment; when negative, represents funds lent to foreigners to finance foreign investment.
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cartel
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An agreement among several producers to obey output restrictions in order to increase their joint profits.
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central bank
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An institution that oversees and regulates the banking system and controls the monetary base.
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chained dollars
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Method of calculating real GDP that splits the difference between growth rates calculated using early base years and the growth rates calculated using lat base years.
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checkable bank deposits
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Bank accounts on which people can write checks.
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circular-flow diagram
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A diagram that represents the transactions in an economy by two kinds of flows around a circle: flows of physical things such as goods or labor in one direction and flows of money to pay for these physical things in the opposite direction.
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classical model of the price level
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A simplified financial model of the price level in which the real quantity of money, M/P is always at its long-run equilibrium level. This model ignores the distinction between the short run and the long run but is useful for analysing the case of high inflation.
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Coase Theorem
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The proposition that even in the presence of externalities, an economy can always reach an efficient solution as long as transaction costs are sufficiently low.
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collusion
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Cooperation among producers to limit production and raise prices so as to raise one another's profits.
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commercial bank
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A bank that accepts deposits and is covered by deposit insurance.
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commodity
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Output of different producers regarded by consumers as the same good; also referred to as a standardized product.
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commodity-backed money
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A medium of exchange that has no intrinsic value whose ultimate value is guaranteed by a promise that it can be converted into valuable goods on demand.
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commodity money
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A medium of exchange that is a good, normally gold or silver, that has intrinsic value in other sues.
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common resource
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A resource that is nonexcludable and rival in consumption
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comparative advantage
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the advantage conferred on an individual or nation in producing a good or service if the opportunity cost of producing the good or service is lower for that individual or nation that for other producers.
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compensating differentials
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Wage differences across jobs that reflect the fact that some jobs are less pleasant or more dangerous than others.
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competitive market
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A market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold.
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complements
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Pairs of goods for which a rise in the price of one good leads to a decrease in the demand for the other good.
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constant marginal cost
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Each additional unit costs the same to produce as the previous one.
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constant returns to scale
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Long-run average total cost (ATC) is constant as output increases.
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consumer price index (CPI)
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A measure of prices; calculated by surveying market prices for a market basket intended to represent the consumption of a typical urban American family of four. Most commonly used measure of prices in the United States.
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consumer spending
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Household spending on goods and services from domestic and foreign firms.
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consumer surplus
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A term often used to refer both to individual consumer surplus and to total consumer surplus.
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consumption bundle
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(of an individual): The collection of all the goods and services consumed by a given individual.
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consumption function
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An equation showing how an individual household's consumer spending varies with the household's current disposable income.
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consumption possibilities
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The set of all consumption bundles that can be consumed, given a consumer's income and prevailing prices.
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contractionary fiscal policy
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Policy that reduces aggregate demand by decreasing government purchases, increasing taxes, or decreasing transfers.
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contractionary monetary policy
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Policy that reduces aggregate demand and output by raising the interest rate.
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convergence hypothesis
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A principle of economic growth that holds that international differences in real GDP per capita tend to narrow over time because countries that start with lower real GDP per capita tend to have higher growth rates.
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copyright
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the exclusive legal right of the creator of a literary or artistic work to profit from that work; like a patent, it is a temporary monopoly.
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cost
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(of a potential seller): The lowest price at which a seller is willing to sell a good.
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cost-benefit analysis
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an estimate of the costs and benefits of providing a good. When governments use this, they estimate the social costs and social benefits of providing a public good.
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cross-price elasticity of demand
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A measure of the effect of the change in the price of one good no the quantity demanded of the other; it is equal to the percent change in the quantity demanded of one good divided by the percent change in the price of another good.
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crowding out
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the negative effect o budget deficits on private investment, which occurs because government borrowing drives up interest rates.
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currency in circulation
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Actual cash held by the public.
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cyclical unemployment
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The difference between the actual rate of unemployment and the natural rate of unemployment
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cyclically adjusted budget balance
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An estimate of what the budget balance would be if real GDP were exactly equal to potential output.
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deadweight loss
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the loss in total surplus that occurs whenever an action or a policy reduces the quantity transacted below the efficient market equilibrium quantity.
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debt deflation
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The reduction in aggregate demand arising form the increase in the real burden of outstanding debt caused by deflation; occurs because borrowers, whose real debt rises as a result of deflation, are likely to cut spending sharply, and lenders, whose real assets are now more valuable, are less likely to increase spending.
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debt-GDP ratio
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Government debt as a percentage of GDP, frequently used as a measure of a government's ability to pay its debts.
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decreasing marginal benefit
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the case in which each additional unit of an activity produces less benefit than the previous unit.
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decreasing returns to scale
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Long-run average total cost (LRATC) increases as output increases. Also known as diseconomies of scale.
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deductible
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A sum specified in a n insurance policy that the insured individual must pay before being compensated for a claim; deductibles reduce moral hazard.
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default
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The risk that the bond issuer fails to make payments as specified by the bond contract.
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deflation
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A fall in the overall level of prices.
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demand curve
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A graphical representation of the demand schedule, showing the relationship between quantity demanded and price.
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demand price
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the price of a given quantity at which consumers will demand that quantity.
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demand schedule
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A list or table showing how much of a good or service consumer will want to buy at different prices.
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demand shock
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An event that shifts the aggregate demand curve. When positive, it is associated with higher demand for aggregate output at any price level and shifts the curve to the right. When negative, it is associate with lower demand for aggregate output at any price level and shifts the curve to the left.
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deposit insurance
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A guarantee that a bank's depositors will be paid even if the bank can't come up with the funds, up to a maximum amount per account.
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depreciation
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A fall in the value of a currency in terms of other currencies.
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devaluation
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A reduction in the value of a currency that is set under a fixed exchange rate regime.
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diminishing marginal rate of substitution
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The principle that the more of one good that is consumed in proportion to another, the less of the second good the consumer is willing to substitute for another unit of the first good.
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diminishing returns to an input
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The effect observed when an increase in the quantity of an input, while holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input.
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diminishing returns to physical capital
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IN an aggregate production function when the amount of human capital per worker and the state of technology are held fixed, each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity. Ex. The fourth person you hire to help plow a field will do less additional work than the second or third person you hired for that same job.
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discount rate
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The rate of interest the Federal Reserve charges on loans to banks that fall short of reserve requirements.
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discount window
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A protection against bank runs in which the Federal Reserve stands ready to lend money to banks in trouble.
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discouraged workers
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Individuals who want to work but who have stated to government researchers that they aren't currently searching for a job because they see little prospect of finding one given the state of the job market.
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discretionary fiscal policy
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Fiscal policy that is the direct result of deliberate actions by policy makers rather than rules.
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discretionary monetary policy
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Policy actions, either changes in interest rates or changes in the money supply, undertaken by the central bank based on its assessment of the state of the economy.
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disinflation
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The process of bringing down inflation that has become embedded in expectations; a reduction in the rate of inflation.
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disposable income
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Income plus government transfers minus taxes; the total amount of household income available to spend on consumption and saving
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diversification
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Investment in several different assets with unrelated, or independent, risks, so that the possible losses are independent events. Ex. Invest in Victoria's Secret, Oil Companies, and Furniture Design Inc.
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domestic demand curve
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A demand curve that shows how the quantity of a good demanded by domestic consumers depends on the price of that good.
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domestic supply curve
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a supply curve that shows how the quantity of a good supplied by domestic producers depends on the price of that good.
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dominant strategy
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In game theory, an action that is a player's best action regardless of the action taken by the other player. Ex. Confess in the Prisoner's Dilemma
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duopolist
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One of the two firms in a duopoly
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duopoly
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An oligopoly consisting of only two firms.
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economic growth
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The growing ability of the economy to produce goods and services.
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economic profit
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A business' revenue minus the opportunity cost of resources; usually less than the accounting profit.
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economic signal
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Any piece of information that helps people make better economic decisions.
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economics
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The social science that studies the production, distribution, and consumption of goods and services.
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economy
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A system for coordinating society's productive activities.
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efficiency wages
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Wages that employers set above the equilibrium wage rate as an incentive for workers to deliver better performance.
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efficient (Pareto efficient)
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Describes a market or economy that takes all opportunities to make some people better off without making other people worse off.
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efficient allocation of risk
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The case in which those most willing to bear risk are those who end up bearing it.
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efficient markets hypothesis
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A principle of asset price determination that holds that asset prices embody all publicly available information. the hypothesis implies that stock prices should be unpredictable, or follow a random walk, since changes should occur only in response to new information about fundamentals.
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elastic demand
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When the price elasticity of demand is greater than 1.
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emissions tax
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A tax that depends on the amount of pollution a firm produces.
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employment
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the total number of people currently employed for pay in the economy, either full-time or part-time.
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environmental standards
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Rules established by a government to protect the environment by specifying actions by producers and consumers.
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equilibrium
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An economic situation in whicn no indibidual would be better off doing something different.
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equilibrium exchange rate
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the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied.
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equilibrium price
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The price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the market-clearing price.
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equilibrium quantity
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the quantity of a good or service bought and sold at the equilibrium (or market-clearing) price.
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equilibrium value of the marginal product
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The additional value produced by the last unit of a factor employed in the factor market as a whole.
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equity
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fairness; everyone gets his or her fair share. Since people can disagree about what's "fair," equity isn't as well defined a concept as efficiency.
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European Union (EU)
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A customs union among 27 European nations.
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excess capacity
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when firms produce less than the output at which average total cost (ATC) is minimized; characteristic of monopolistically competitive firms.
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excess reserves
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A bank's reserves over and above the reserves required by law or regulation.
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exchange market intervention
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Government purchases or sales of currency in the foreign exchange market.
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exchange rate
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the price at which currencies trade, determined by the foreign exchange market.
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exchange rate regime
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a rule governing policy toward the exchange rate.
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excise tax
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A tax on sales of a good or service.
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excludable
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(referring to a good): Describes the case in which the supplier can prevent those who do not pay from consuming the good.
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expansion
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Period of economic upturn in which output and employment are rising; most economic numbers are following their normal upward trend; also referred to as a recovery.
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expansionary fiscal policy
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Fiscal policy that increases aggregate demand by increasing government purchases, decreasing taxes, or increasing transfers.
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expansionary monetary policy
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Monetary policy that, through the lowering of the interest rate, increases aggregate demand and therefore output.
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expected utility
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The expected value of an individual's total utility given uncertainty about future outcomes.
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explicit cost
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A cost that involves actually laying out money.
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exporting industries
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Industries that produce goods or services that are sold abroad.
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exports
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Goods and services sold to other countries.
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external benefit
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An uncompensated benefit that an individual or firm confers on others; also known as positive externalities.
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external cost
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An uncompensated cost that an individual or firm imposes on others; also known as negative externalities.
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externalities
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Collective name for external benefits and external costs.
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factor distribution of income
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The division of total income among labor, land, and capital.
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factor intensity
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The difference in the ratio of factors used to produce a good in various industries. For example, oil refining is capital-intensive compared to clothing manufacture because oil refiners use a higher ration of capital to labor than do clothing producers.
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factor markets
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Markets in which firms buy the resources they need to produce goods and services.
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factors of production
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the resources used to produce goods and services. Labor and capital are examples of factors.
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fair insurance policy
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An insurance policy for which the premium is equal to the expected value of the claim.
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federal funds market
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The financial market that allows banks that fall short of reserve requirements to borrow funds from banks with excess reserves.
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federal funds rate
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The interest rate at which funds are borrowed and lent in the federal funds market.
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fiat money
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A medium of exchange whose value derives entirely from its official status as a means of payment.
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final goods and services
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Goods and services sold to the final, or end, user.
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financial asset
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A paper claim that entitles the buyer to future income from the seller. Loans, stocks, bonds, and bank deposits are types of these.
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financial intermediary
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An instiution, such as a mutual fund, pension fund, life insurance company, or bank, that transforms the funds it gathers from many individuals into financial assets.
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financial markets
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The banking, stock and bond markets, which cahnnel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing.
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financial risk
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Uncertainty about future outcomes that involve financial losses and gains
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firm
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An organization that produces goods and services for sale.
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fiscal policy
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Changes in government spending and taxes designed to affect overall spending.
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fiscal year
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The time period used for much of government accounting, running from October 1 to September 30. Labeled by the calendar year in which they end.
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Fisher effect
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The principle by which an increase in expected future inflation drives up the nominal interest rate, leaving the expected real interest rate unchanged.
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fixed cost
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A cost that does not depend on the quantity of output produced; the cost of a fixed input.
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fixed exchange rate
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An exchange rate regime in which the government keeps the exchange rate against some other currency at or near a particular target.
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fixed input
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An input whose quantity is fixed for a period of time and cannot be varied (for example, land).
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floating exchange rate
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An exchange rate regime in which the government lets the exchange rate go wherever the market takes it.
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forecast
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A simple prediction of the future.
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foreign exchange controls
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Licensing systmes that limit the right of individuals to buy foreign currency.
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foreign exchange market
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the market in which currencies can be exchanged for each other.
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foreign exchange reserves
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Stocks of foreign currency that governments can use to buy their own currency on the foreign exchange market.
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free entry and exit
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Describes an industry that potential producers can easily enter or current producers can leave.
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free trade
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Trade that is unregulated by government tariffs or other artificial barriers; the levels of exports and imports occur naturally, as a result of supply and demand.
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free-ridder problem
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When individuals have no incentive to pay for their own consumption for a good, they will take a "free ride" on anyone who does pay; a problem with goods that are nonexcludable.
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frictional unemployment
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Unemployment due to time workers spend in job search
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gains from trade
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An economic principle that states that by dividing tasks and trading, people can get more of what they want through trade than they could if they tried to be self-sufficient.
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game theory
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the study of behavior in situations of interdependence. Used to explain the behavior of an oligopoly.
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GDP deflator
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A price measure for a given year that is equal to 100 times the ratio of nominal GDP to real GDP in that year.
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GDP per capita
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GDP divided by the size of the population; equivalent to the average GDP per person.
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Gini coefficient
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A number that summarizes a country's level of income inequality based on how unequally income is distributed across quintiles.
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globalization
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The phenomenon of growing economic linkages among countries.
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government borrowing
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the amount of funds borrowed by the government in financial markets to buy goods and services.
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government purchases of goods and services
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Total purchases by federal, state, and local governments on goods and services.
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government transfers
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Payments by the government to individuals for which no good or service is provided in return.
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gross domestic product (GDP)
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The total value of all final goods and services produced in the economy during a given period, usually a year.
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growth accounting
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Estimates the contribution of each of the major factors (physical and human capital, labor, and technology) in the aggregate production function.
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Heckscher-Ohlin model
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A model of international trade in which a country has a comparative advantage in a good whose production is intensive in the factors that are abundantly available in that country.
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household
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A person or a group of people who share income.
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human capital
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The improvement in labor created by the education and knowledge embodied in the workforce.
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illiquid
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Describes an asset that cannot be quickly converted into cash without much loss of value.
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imperfect competition
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A market structure in which no firm is a monopolist, but producers nonetheless have market power they can use to affect market prices.
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implicit cost
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A cost that does not require the outlay of money; it is measured by the value, in dollar terms, of forgone benefits.
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implicit cost of capital
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The opportunity cost of the capital used by a business; that is, the income that could have been realized had the capital been used in the next best alternative way.
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implicit liabilities
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Spending promises made by governments that are effectively a debt despite the fact that they are not included in the usual debt statistics. In the United States, the largest implicit liabilities arise from Social Security and Medicare, which promise transfer payments to current and future retirees (Social Security) and to the elderly (Medicare).
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import-competing industries
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Industries that produce goods or services that are also imported.
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import quota
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A legal limit on the quantity of a good that can be imported.
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imports
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Goods and services purchased from other countries.
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incentive
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Anything that offers rewards to people who change their behavior.
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incidence
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(of a tax): A measure of who really pays a tax.
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income distribution
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The way in which total income is divided among the owners of the various factors of production.
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income effect
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the change in the quantity of a good consumed that results from the change in a consumer's purchasing power due to the change in the price of the good.
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income-elastic demand
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When the income elasticity of demand for a good is greater than 1.
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income elasticity of demand
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The percent change in the quantity of a good demanded when a consumer's income changes divided by the percent change in the consumer's income.
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income-expenditure equilibrium
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A situation in which aggregate output, measured by real GDP, is equal to planned aggregate spending and firms have no incentive to change output.
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income-expenditure equilibrium GDP
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The level of real GDP at which real GDP equals planned aggregate spending.
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income-inelastic demand
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When the income elasticity of demand for a good is positive but less than 1.
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income tax
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A tax on ht eincome of an individual or family.
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increasing marginal cost
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The case in which each additional unit costs more to produce than the previous one.
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increasing returns to scale
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Long-run average total cost (LRATC) declines as output increases (also referred to as economies of scale).
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indifference curve
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A contour line showing all consumption bundles that yield the same amount of total utility for an individual.
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indifference curve map
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A collection of indifference curves for a given individual that represents the individual's entire utility function; each curve corresponds to a different total utility level.
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individual choice
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The decision by an individual of what to do, which necessarily involves a decision of what not to do.
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individual consumer surplus
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The net gain to an individual buyer from the purchase of a good; equal to the difference between the buyer's willingness to pay and the price paid.
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individual demand curve
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A graphical representation of the relationship between quantity demanded and price for an individual consumer.
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individual labor supply curve
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A graphical representation showing how the quantity of labor supplied by an individual depends on that individual's wage rate.
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individual producer surplus
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the net gain to an individual seller from slling a good; equal to the difference between the price received and the seller's cost.
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individual supply curve
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A graphical representation of the relationship between quantity supplied and price for an individual consumer.
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individual labor supply curve
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A graphical representation showing how the quantity of labor supplied by an individual depends on that individual's wage rate.
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individual producer surplus
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The net gain to an individual seller from selling a good; equal to the difference between the price received and the seller's cost.
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individual supply curve
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A graphical representation fo the relationship between quantity supplied and price for an individual consumer.
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industrial policy
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A policy that supports industries believed to yield positive externalities.
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industry supply curve
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A graphical representation that shows the relationship between the price of a good and the total output of the industry for that good.
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inefficient
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Describes a market or economy in which there are missed opportunities: some people could be made better off without making other people worse off.
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inefficient allocation to consumers
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A form of inefficiency in which people who want a good badly and are willing to pay a high price don't get it, and those who care relatively little about the good and are only willing to pay a low price do get it; often a result of a price ceiling.
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inefficient allocation of sales among sellers
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A form of inefficiency in which sellers who would be willing to sell a good at the lowest price are not always those who actually manage to sell it; often the result of a price floor.
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inefficiently high quality
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A form of inefficiency in which sellers offer high-quality goods at a high price even though buyers would prefer a lower quality at a lower price; often the result of a price floor.
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inefficiently low quality
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A form of inefficiency in which sellers offer low quality goods at a low price even though buyers would prefer a higher quality at a higher price; often a result of a price ceiling.
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inelastic demand
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When the price elasticity of demand is less than 1.
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inferior good
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A good for which a rise in income decreases the demand for the good.
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inflation
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A rise in the overall level of prices.
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inflation rate
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the annual percent change in a price index--typically the consumer price index (CPI). It is positive when the aggregate price level is rising and negative when the aggregate price level is falling.
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inflation targeting
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An approach to monetary policy that requires that the central bank try to keep the inflation rate near a predetermined target rate.
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inflation tax
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The reduction in the value of money held by the public caused by inflation.
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inflationary gap
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Exists when aggregate output is above potential output.
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infrastructure
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Physical capital, such as roads, power lines, ports, information networks, and other parts of an economy, that provides the underpinnings, or foundation, for economic activity.
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in-kind benefit
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A benefit given in the form of goods or services
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input
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A good or service used to produce another good or service.
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interaction
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(of choices): My choices affect your choices, and vice versa; a feature of most economic situations. the results of this are often quite different from what the individuals intend.
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interdependence
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the relationship among firms when their decisions significantly affect one another's profits; characteristic of oligopolies.
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interest rate
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The price, calculated as a percentage of the amount borrowed, charged by lenders to borrowers for the use of their savings for one year.
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