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Shares Units of ownership in a
company; also known as equities.Social market The economic
model developed in West Germany
following World War II, characterized
by a mixed economy in which
private enterprise is encouraged,
but government intervenes in the
economy to ensure social justice.Stagflation A period of high
inflation, high unemployment,
and low growth.Sticky wages Wages that are
slow to change in response to
market conditions.Supply The amount of a product
that is available to buy.Supply curve A graph showing
the amount of a product or
service that sellers will produce
at different prices.Surplus An imbalance. A trade
surplus is an excess of exports over
imports; a government budget
surplus is an excess of tax revenues
over spending.Tariff A tax imposed on imports,
often to protect domestic producers
from foreign competition.Tax A charge imposed on firms and
individuals by governments. Its
payment is enforced by law.Utilitarianism A philosophy that
claims that choices should be made
so happiness will increase for the
greatest number of people.Utility A unit used to measure
the satisfaction, or happiness,
gained from consuming a product
or service.and part of it is owned privately,
combining aspects of planned
economies and market economies.
Strictly speaking, nearly all
economies are mixed economies,
but the balance can vary widely.
Monetarism A school of economic
thought that believes that the
primary role of government is to
control the money supply. It is
associated with US economist
Milton Friedman and conservative
governments of the 1970s and 80s.
Monetary policy Government
policies aimed at changing the
money supply or interest rates in
order to stimulate or slow down
the economy.
Monopoly A market in which there
is only one firm. Monopoly firms
generally produce a low output,
which they then sell at a high price.
Neoclassical economics The
dominant approach to economics
today. It is based around supply
and demand and rational
individuals, and is often couched
in mathematical terms.
New classical macroeconomics
A school of thought within
macroeconomics that uses forms
of analyses that are based entirely
on a neoclassical framework.
Nominal value The cash value
of something, expressed in the
money of the day. Nominal prices
or wages change due to inflation,
so cannot be usefully compared
across different time periods (a wage
of $50 would not buy the same
amount of goods in 1980 and 2000).
Oligopoly An industry with only a
few firms. In an oligopoly there is a
danger that firms may form cartels
to fix prices.Pareto efficiency A situation in
which no change can be made
in the allocation of goods to make
someone better off without making
somebody else worse off. Named
after Vilfredo Pareto.Perfect competition An idealized
situation in which buyers and sellers
have complete information and there
are so many different firms producing
the same product that no individual
seller can influence the price.Phillips curve A mathematical
graph illustrating the supposed
inverse relationship between
inflation and unemployment.Planned economy
See Command economy.Price The quantity of payment,
in money or goods, given by a
buyer to a seller in return for a
good or service.Protectionism An economic policy
aimed at restricting international
trade, in which a country imposes
tariffs or quotas on imports.Public good Goods or services,
such as street lighting, that will not
be provided by private firms.Quantitative easing The injection
of new money into an economy by a
central bank.Real value The value of something
measured in terms of the amount of
goods or services they can buy.Recession A period during
which an economy’s total
output decreases.GLOSSARY