Definitions of Economics by Jim Stanford for preparations of Master of Economics or other Business Studies. These definitions is also useful for anyone who do business.
Structures: A form of fixed capital consisting of buildings and other large constructed assets (including bridges, pipelines, mines, highways, etc.).
Supply-Constrained: An economy is supply-constrained when its total output is limited only by the supply of factors of production (including labour, capital, and natural resources). Contrasts with a demand-constrained economy.
Surplus: Any agent or sector in the economy (household, business, or government) experiences a surplus when its income exceeds its expenditure.
Surplus, Economic: For the economy as a whole, the surplus equals the amount of production over and above what is required for the reproduction of the existing economic system (including the necessary consumption required to reproduce the population, and depreciation on the existing stock of capital). An economy’s aggregate surplus can be consumed (to allow for a standard of consumption higher than mere subsistence, or to finance wasteful projects like wars or monument-building), or re-invested to expand future production.
Surplus, Government: A government surplus exists when a government’s tax revenues exceed its total spending (including both interest charges and program spending).
Sustainability: A condition in which the economy does not utilize more resources from the natural environment than can be replenished by the normal reproductive capacity of the environment, and does not expel more pollution into the environment than can be absorbed without ongoing deterioration in environmental quality. Only a sustainable economy can function long into the future without encountering natural or environmental limits.
Tariff: A tariff is a tax imposed on the purchase of imports. It is usually imposed in order to stimulate more domestic production of the product in question (instead of meeting domestic demand through imports).
Taxes: Compulsory government levies collected to pay for public spending. There are many different types of taxes (income, corporate, sales, wealth, payroll, and environmental taxes); each has a different impact on the economy, and on different groups within the economy.
Technology: Technology is the knowledge which humans collectively possess regarding how to produce goods and services in more efficient ways.
Terms of Trade: The ratio of the average price of a country’s exports, to the average price of its imports, is its terms of trade. In theory, an improvement in a country’s terms of trade raises its real income (since it can “convert” a given amount of its own output into a larger amount of consumable products through trade) – although in practice it depends on how those terms of trade gains are distributed.
Tradeable: A product (a good or service) is tradeable if its purchaser can buy it far away from the place where it is produced. Most goods (other than perishable or extremely perishable products) are tradeable, and some services (such as tourism, and specialized financial, business, and educational services) are also tradeable.
Transfer Payments: Governments typically redistribute a share of tax revenues back to specified groups of individuals in the form of various social programs (such as welfare benefits, unemployment insurance, public pensions, or child benefits). These transfer payments supplement the market income of the households which receive them.
Underdevelopment: Poor countries can be prevented from progressing through the stages of economic development by barriers such as specialization in natural resources, an overdependence on foreign investment, and an inability to stimulate higher-value manufacturing and services industries.
Unemployment: Individuals who would like to be employed, and are actively seeking work, but cannot find a job, are considered “officially” unemployed. Individuals who are not working, but not actively looking for work, are considered to be outside of the labour force, and hence don’t count as “officially” unemployed.
Unemployment Rate: The number of unemployed people measured as a proportion of the labour force.
Unions: Organizations of working people which aim to bargain collectively with employers in order to enhance workers’ bargaining power, raise wages, and regulate working conditions.
Unit Labour Cost: How much an employer pays for the labour required to produce each unit of a good or service. Unit labour cost can be calculated by dividing a worker’s hourly (or annual) labour cost, by the amount (in physical units or value terms) that they produce during that hour (or year). It is thus the ratio of labour costs to productivity. Companies try to reduce their unit labour cost, either by increasing productivity (the denominator) or by reducing labour costs (the numerator).
User Fees: A form of tax in which the users of public services are charged a specified fee to cover some or all of the cost of providing that service.
Value Added: The value added in a particular stage of production equals the value of total output, less the value of intermediate products (including capital equipment, raw materials, and other supplies). By definition, value added is ascribed to the various factors of production (including the wages paid to workers, the profit paid to a company’s owners, and interest paid to lenders). Value added in the total economy equals its gross domestic product (GDP).
Wage Labour: A form of work in which employees perform labour for others, under their direction, in return for wages or salaries. The employer owns and controls the product of the labour.
