emre glossary

• What does Absolute Advantage mean in economics?


  It means an economy can produce more goods with the same inputs.
• How does Absolute Advantage differ from other economies?


  It is more efficient in producing a product than the country it trades with.
• What is Absolute Poverty?


  It is when a household cannot meet basic income needs.
• Why is Absolute Poverty hard to eliminate?


  Because it is a consistent standard over time.
• What is an Ad Valorem Tax?


  It is an indirect tax based on the value of a good.
• What does Aggregate Supply refer to?


  Total supply of goods and services in a given time period.
• What is Allocative Efficiency?


  It is when firms produce at the quantity and price consumers demand.
• What is Anchoring Bias?


  It is when decisions are based on familiarity with events.
• What does the Average Revenue Curve represent?

  It is a downward-sloping curve representing the producer's demand curve.
• How is Average Revenue defined?


  It is the revenue earned per unit sold or per customer.
• What is Average Total Cost?


  It is the sum of Average Fixed and Average Variable Cost.
• What does Backward Vertical Integration involve?


  It focuses on merging with suppliers rather than customers.
• What is the Balance of Payments?


  It records all transactions between an economy and its trading partners.
• What does a Balance Sheet show?


  It shows a snapshot of assets and liabilities on a specific date.
• What is Behavioral Economics?


  It combines economics and psychology to understand decision-making.
• What is Bilateral Aid?


  It is aid given directly from one country's government to another.
• What is the purpose of Bilateral Aid?


  To foster democracy, economic growth, and sustainability.
• What is a Bilateral Exchange Rate?


  It is the rate at which one currency can be traded against another.
• What does Bounded Rationality claim?


  It claims decision-making is limited by psychological and social factors.
• What is Break-even?


  It is the point where costs and revenue are equal.
• What is a Budget Deficit?


  It occurs when government spending exceeds income.
• What does a Budget Line show?


  It shows combinations of goods consumers can afford.
• What is a Budget Surplus?


  It occurs when government spending is less than income.
• What are Buffer Stock Schemes?


  They are price ranges where commodities' prices fluctuate.
• What is Capital in economics?


  It is one of the four factors of production used in production processes.
• What does the Capital Account reflect?


  It reflects the net change in ownership of an economy's assets.
• What is Capital Flight?


  It occurs when assets rapidly flow out of a country.
• What is a Capital Market?


  It is where savings and investments are exchanged.
• What are Capital Transfers?


  They involve transfers of ownership of fixed assets and funds.
• What is a Cartel?


  It is formed when firms agree to fix prices or set quotas.
• What does Ceteris Paribus mean?


  It means 'all other things being unchanged or constant'.
• What is Choice Architecture?


  It examines how choices are presented to influence decisions.
• What is the Circular Flow of Income?


  It is a model showing how money flows in the economy.
• What is the Claimant Count?


  It is the number of people claiming Jobseeker’s Allowance.
• Why is the Claimant Count known to underestimate unemployment?


  Because not everyone eligible claims Jobseeker’s Allowance.
• What does Collusion refer to?


  It is the act of working together to gain higher profits.
• What is a Command Economy?


  It is a system where the government determines production and pricing.
• What is a Commercial Bank?


  It is a financial institution that accepts deposits and gives loans.
• What is Comparative Advantage?


  It occurs when a country can produce at a lower opportunity cost.
• What is the Competition and Markets Authority (CMA)?


  It promotes competition for the benefit of consumers in the UK.