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

Seasonal unemployment
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A type of frictional unemployment in which a worker is in between jobs that are only available during certain seasons. For example a ski instructor who guides rafting trips in the summer will be seasonally unemployed in the spring and fall.

Seasonal unemployment
M3
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The broadest component of the money supply. Equal to M2 plus large time deposits.

M3
Corrective tax (Pigouvian tax)
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A tax on the production of a demerit good, or one that creates negative externalities in its production or consumption. Meant to achieve a more socially optimal level of output.

Corrective tax (Pigouvian tax)
Stagflation
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A macroeconomic situation in which both inflation and unemployment increase. Caused by a negative supply shock.

Stagflation
Infant Industry
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An industry that is emerging in a less developed country, but which has not achieved the economies of scale and other efficiencies that allow it to compete with larger producers in more developed countries. Sometimes used as a justification for protectionist policies.

Infant Industry
Subsidy
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Payments made from the government to individuals or firms for the production or consumption of particular goods or services. Subsidies reduce the cost of production or increase the benefit of consumption, and therefore lead to a greater equilibrium quantity in the market for the subsidized good.

Subsidy
Free trade area
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An agreement between nations to reduce or remove tariffs and quotas on all goods traded between the member states. Nations can maintain their own external barriers to trade, thus this is a lower level of economic integration than a customs union, but it represents a higher level of integration than a preferential trade area.

Free trade area
Sustainable development
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A system for achieving improvements in living standards which is able to endure over a long period, characterized by the use of renewable resources and other technologies that both improve living standards and protect the environment

Sustainable development
Preferential trade agreement
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A free trade agreement in which member states agree to remove protectionist measures on certain goods or services traded between them. The lowest level of economic integration, since only particular goods are included in the agreement.

Preferential trade agreement
Wage
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The payment to labor in the resource market. Wages are the “price of labor”

Wage

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