Flashcards – all units

Only 10 flashcards are shown at a time! Once you’ve mastered these 10 Economic terms, click the shuffle button below for 10 new terms. There are approximately 330 flashcards in total covering Micro, Macro, International and Development Economics

Common market
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A free trade agreement in with all the characteristics of a customs union, but in which the member nations also remove all barriers to the flow of factors of production between them. Labor and capital can move between member states without any government interference.

Common market
Derived Demand
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When the demand for something depends on the demand for something else. For example the demand for oil depends on the demand for gasoline, which is the finished product that oil is used to produce.

Derived Demand
GDP (expenditure approach)
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Consumption + Investment + Government spending + Net Exports: Measures the total spending on goods and services produced in a nation in a year.

GDP (expenditure approach)
Structural unemployment
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Caused by changes in the structure of demand for goods and in technology; workers who are unemployed because their skills do not match what is in demand by producers in the economy.

Structural unemployment
Price Elasticity of Demand (PED)
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A measure of the responsiveness of consumers to a change in the price of a particular good. Measures the percent change in quantity divided by the percentage change in the price of a good.

Price Elasticity of Demand (PED)
Current account surplus
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When the value of a nation’s exports to the rest of the world exceeds the value of its imports from the rest of the world. Also called a trade surplus.

Current account surplus
Trade deficit
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When a country’s total spending on imported goods and services exceeds its total revenues from the sale of exports to the rest of the world. Another term for current account deficit in the balance of payments.

Trade deficit
Soft loan
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Loans made by foreign governments or international financial institution to less developed countries at favorable interest rates, lower than those the country would have paid if borrowing from a private bank. Allows less developed countries to keep interest payments low while acquiring much needed financing for economic development projects.

Soft loan
Shift
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Refers to movements of curves in an economic diagram either inward or outward, up or down.

Shift
Shortage
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When the quantity demanded for a particular good is greater than the quantity supplied. Also called “excess demand”. Occurs when the price is below the equilibrium level, for example, when a government imposes a price ceiling in a market.

Shortage

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