The Federal Reserve
The Federal Reserve (known more informally as “the Fed”) is the central bank of the United States of America. It is made up of a network of 12 regional Federal Reserve banks, but the Fed’s power centers in its New York bank.
Consumer Sovereignty
Consumer sovereignty is the theory that consumer preferences determine the production of goods and services. This means consumers can use their spending power as ‘votes’ for goods. In return, producers will respond to those preferences and produce those goods.
The Accelerator Effect
The Accelerator Effect, a Keynesian concept, is used to explain the level of investment in an economy. The accelerator effect refers to a positive effect on private fixed investment of the growth of the market economy.
Indirect Tax
An indirect tax is a tax applied on the manufacture or sale of goods and services. There are two types of indirect taxes – ad valorem tax and specific tax.
Constant Returns to Scale
The concept of “returns to scale” describes the rate of increase in production relative to the associated increase in the factors of production in the long run. In other words, it describes how effectively and efficiently—in other words, profitably—a particular company or business is producing its goods or services.
Economic Profit
Economic profit is different from the general business term ‘profit’. The general assumption is that firms are producing goods to maximize profits.
Inferior Good
The term “inferior good” describes a good for which demand decrease as incomes increase. They are the opposite of “normal goods,” which are goods for which demand increases as incomes increase.
Expansionary Monetary Policy
Expansionary monetary policy is a form of macroeconomic monetary policy that seeks to amplify economic growth and aggregate demand. In order to do so, regulatory authorities like central banks “loosen” monetary policy by increasing the money supply and/or lowering interest rates.
Frictional Unemployment
Frictional unemployment is a form of unemployment that specifically arises in a healthy economy. In most cases, frictional unemployment is voluntary.
Demand Side Policies
Demand side policies affect aggregate demand to affect output, employment and inflation.They can be classified into fiscal policy and monetary policy.
Business Cycle
The different phases and fluctuations that an economy goes through over time, such as periods of booms (expansions) and economic recessions (contractions), are collectively known as the business cycle.
Cost-Push Inflation
A fall in Aggregate Supply is the cause of Cost-Push Inflation. An interaction of cost-push inflation & demand-pull inflation results in a wage-price spiral.
Malthusian Theory of Population
The Malthusian Theory of Population is a theory of exponential population growth and arithmetic food supply growth created by Thomas Robert Malthus.
Absolute Advantage
According to Adam Smith, who is regarded as the father of modern economics, countries should only produce goods that they have an absolute advantage in.
Cyclical Unemployment
Cyclical unemployment is a form of unemployment that occurs as a result of an economic decline or periods of negative economic growth in a business cycle. Other names for cyclical unemployment are “deficient-demand unemployment” or “Keynesian unemployment”.
The 25 Best Economics Podcasts Of 2023
Listed below are the top 25 Economics Podcasts of 2023. We’ve been researching and sparking our curiosity since we started the list back in 2016. Since then, our annual catalog has only grown in popularity. Our list isn’t ranked in any particular order. But we’ve … Read more
Top 100 Economics Blogs of 2023
Welcome, and thank you for joining us for the 5th annual Top Economics Blogs list! We are happy, once again, to introduce to you a freshly updated list of economics blogs for 2020.
Introduction to Externalities
Externalities are a form of market failure. Externalities are defined as the spillover effects of the consumption or production of a good that is not reflected in the price of the good.
Economic Systems
The way scarce resources get distributed within an economy determines the type of economic system. There are four different types of Economic Systems; a traditional economy, a market economy, a command economy, and a mixed economy.
Price Elasticity of Demand (PED)
Price Elasticity of Demand (PED) is defined as the responsiveness of quantity demanded to a change in price. The demand for a product can be elastic or inelastic, depending on the rate of change in the demand with respect to the change in the price.
Economic Growth
The economic growth of a country is the increase in the market value of the goods and services produced by an economy over time.
Free Market
A free market economy is a type of economy that promotes the production and sale of goods and services, with little to no control or involvement from any central government agency.
Trading Bloc
A trading bloc is a formal agreement between two or more regional countries that remove trade barriers between the countries in the agreement while keeping trade barriers for other countries.
Economies of Scale
Economies of scale are achieved when increasing the scale of production decreases long-term average costs. In other words, the cost of production per unit decreases as a company produces more units.
Economies of Scope
When there are economies of scope, the long-run marginal and average costs for a given actor (whether a firm or, on a larger scale, an economy) lessen with the production of complementary goods/services.
Introduction to Inflation
Inflation is the sustained increase of the price level. The rate of inflation is the change in general price levels over a period. When the price level rises, each unit of currency buys fewer goods and services.
Diseconomies of Scale
Diseconomies of scale are the product of decreasing returns to scale. In other words, they happen when a business grows to the point that its per-unit costs begin to rise, rather than continuing to decrease as with economies of scale.
Capitalism
Capitalism is an economic system in which private individuals and/or companies own the four factors of production. The four factors are land, capital, land/natural resources, and entrepreneurship.
Perfect Competition
Perfect competition or pure competition is a type of market structure. It is important to note that this form of market structure does not actually exist in the real world and is thus considered to be theoretical.
The Demographic Transition Model
The demographic transition model (DTM) shows shifts in the demographics of a population during economic and social development. This transition is two-fold: both death and birth rates go from high to low over time as development progresses.
Adverse Selection
Sometimes known as “anti-selection,” Adverse selection describes circumstances in which either buyers or sellers use information that the other group does not have, specifically about risk factors related to a particular business undertaking/transaction.
Collective Bargaining
The term “collective bargaining” describes the way in which groups of workers (typically represented by labor unions) negotiate with their employers to determine the terms of their employment.
Deadweight Loss
A deadweight loss is a cost to society as a whole that is generated by an economically inefficient allocation of resources within the market. Deadweight loss can also be referred to as “excess burden.”
What is Economics?
Economics, a discipline and set of methodologies within the social sciences, can be described in a multitude of ways. The field focuses on the distribution, consumption, and production of wealth; one can also say that economists study human behavior and choice regarding buying and selling.
Allocative Efficiency
Allocative efficiency is the level of output where the price of a good or service is equal to the marginal cost (MC) of production. Allocative efficiency is achieved when goods and/or services are distributed optimally in response to consumer demands (that is, wants and needs), and when the marginal cost and marginal utility of goods and services are equal.
Structural Unemployment
Structural unemployment is a persistent, extended type of unemployment resulting from changes in the foundational structure of the economy. Factors that contribute to structural unemployment include government policy, competition, technology, and more.