Economic activities •
Business – any activity or enterprise entered into for profit. •
Business cycle – intervals of general expansion followed by recession in economic performance. •
Collective action – action taken together by a group of people whose goal is to enhance their condition and achieve a common objective. •
Commerce – organized system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered large-scale distribution and transfer (exchange through buying and selling) of goods and services at the right time, place, quantity, quality and price through various channels among the original producers and the final consumers within local, regional, national or international economies. •
Competition – different economic firms in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place. •
Consumption – use of resources to fulfill present needs and desires •
Distribution – the way total output, income, or wealth is distributed among individuals or among the factors of production (such as labour, land, and capital). •
Employment – relationship between two parties regulating the provision of paid labour services. •
Entrepreneurship – creation or extraction of economic value in ways that generally entail beyond the minimal amount of risk •
Export – a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. •
Finance – monetary resources and to the study and discipline of money, currency, assets and liabilities. •
Government spending – all government consumption, investment, and transfer payments. •
Import – part of the International Trade which involves buying and receiving of goods or services produced in another country. •
Investment – commitment of resources to achieve later benefits •
Mergers and acquisitions – business transactions in which the ownership of companies, business organizations, or their operating units are transferred to or consolidated with another company or business organization. •
Pricing – process whereby a business sets and displays the price at which it will sell its products and services and may be part of the business's marketing plan. •
Geographical pricing – practice of modifying a basic list price based on the geographical location of the buyer. •
Production – process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. •
Trade – the transfer of goods and services from one person or entity to another, often in exchange for money. •
Balance of trade – difference between the monetary value of a nation's exports and imports of goods over a certain time period. •
Fair trade – arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. •
Free trade – trade policy that does not restrict imports or exports. •
International trade – exchange of capital, goods, and services across international borders or territories • Safe trade •
Tax – mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. •
Terms of trade – relative price of exports in terms of imports, defined as the ratio of export prices to import prices •
Trade bloc – intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states. •
Trade pact – wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. •
Trade route – logistical network identified as a series of pathways and stoppages used for the commercial transport of cargo.
Economic forces •
Aggregate demand – total demand for final goods and services in an economy at a given time. •
Aggregate supply – total supply of goods and services that firms in a national economy plan on selling during a specific time period. •
Deflation – decrease in the general price level of goods and services. •
Economic activity (see above) •
Economies of agglomeration – how urban agglomeration occurs in locations where cost savings can naturally arise. •
Economies of scale – cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of cost (production cost) . •
Economies of scope – cost savings formed by broadening production/services through diversified products. •
Incentive – anything that persuade a person or organization[2] to alter their behavior to produce the desired outcome. •
Inflation – general increase in the prices of goods and services in an economy •
Hyperinflation – very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. •
Invisible hand – the incentives which free markets sometimes create for self-interested people to accidentally act in the public interest, even when this is not something they intended. •
Preference – preference refers to an order by which an agent, while in search of an "optimal choice", ranks alternatives based on their respective utility. •
Profit motive – motivation of firms that operate so as to maximize their profits.
Economic problems •
Depression – period of carried long-term economic downturn that is the result of lowered economic activity in one or more major national economies •
Financial crisis – situations in which some financial assets suddenly lose a large part of their nominal value. •
Hyperinflation – very high and typically accelerating inflation. •
Poverty – condition in which an individual lacks the financial resources and essentials for a basic standard of living. •
Recession – business cycle contraction that occurs when there is a period of broad decline in economic activity. •
List of recessions •
Stagflation – combination of high inflation, stagnant economic growth, and elevated unemployment. •
Unemployment – proportion of people above a specified age (usually 15)[2] not being in paid employment or self-employment but currently available for work during the reference period
Trends and influences •
Decentralization – process by which the activities of an organization, particularly those related to planning and decision-making, are distributed or delegated away from a central, authoritative location or group and given to smaller factions within it. •
Globalization – widespread international movement of goods, capital, services, technology and information. •
Industrialisation – period of social and economic change that transforms a human group from an agrarian society into an industrial society, involving an extensive reorganisation of an economy for the purpose of manufacturing. •
Internationalization – process of increasing involvement of enterprises in international markets,
Economic measures •
Consumer price index – statistical estimate of the level of prices of goods and services bought for consumption purposes by households. •
Economic indicator – statistic about an economic activity to allow analysis of economic performance and predictions of future performance. •
Human Development Index – statistical composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, used to rank countries into four tiers of human development. •
Measures of national income and output – used in economics to estimate total economic activity in a country or region •
Gross domestic product – monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries •
Natural gross domestic product – highest level of real gross domestic product (potential output) that can be sustained over the long term •
Gross national product – market value of all the goods and services produced in one year by labor and property supplied by the citizens of a country. •
National income – amount of factor incomes earned by the residents of a country •
Net national income – net national product (NNP) minus indirect taxes •
Poverty level – minimum level of income deemed adequate in a particular country •
Standard of living – level of income, comforts and services available to an individual, community or society. •
UN Human Development Index – statistical composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, which is used to rank countries into four tiers of human development •
Value – measure of the benefit provided by a good or service to an economic agent •
Cost-of-production theory of value – theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. •
Labor theory of value – theory of value that argues that the exchange value of a good or service is determined by the total amount of "socially necessary labor" required to produce it. •
Surplus value – difference between the amount raised through a sale of a product and the amount it cost to manufacture it •
Time value of money – fact that there is normally a greater benefit to receiving a sum of money now rather than an identical sum later •
Value added – difference between market value of a product or service, and the sum value of its constituents. •
Value of Earth – net worth of Earth, equated with the sum of all ecosystem services as evaluated in ecosystem valuation or full-cost accounting. •
Value of life – economic value used to quantify the benefit of avoiding a fatality •
Measuring well-being – an individual's perception of their position in life in the context of the culture and value systems in which they live and in relation to their goals, expectations, standards and concerns •
Working time – period of time that a person spends at paid labor.
Economic participants •
Employer – a person conducting a business or undertaking who recruits labour and expertise •
Employee – a person who contributes labour and expertise to an endeavor of an employer •
Entrepreneur – individual who creates and/or invests in one or more businesses, bearing most of the risks and enjoying most of the rewards •
Central bank – institution that manages the monetary policy of a country or monetary union •
Reproductive labor – work that is often associated with care giving and domestic housework roles including cleaning, cooking, child care, and the unpaid domestic labor force
Economic politics •
Antitrust – field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. •
Cartel – group of independent market participants who collude with each other as well as agreeing not to compete with each other in order to improve their profits and dominate the market •
Government-granted monopoly – form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service •
Reaganomics – neoliberal economic policies promoted by U.S. President Ronald Reagan during the 1980s, focusing mainly on supply-side economics. •
Taxation – imposition of tax, i.e. a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. •
Income tax – a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income) •
Land value tax – levy on the value of land without regard to buildings, personal property and other improvements upon it. •
Sales tax – tax paid to a governing body for the sales of certain goods and services. •
Tariff – duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. •
Value-added tax – consumption tax that is levied on the value added at each stage of a product's production and distribution
Economic policy Economic policy – all strategic interventions by public administrations – including the state, central bank, and local authorities – across economic activity, aimed at achieving objectives like growth, full employment, and social justice, thereby correcting existing imbalances. •
Agricultural policy – Government actions targeting the agricultural sector to achieve objectives like food security, farmer income, and environmental sustainability. •
Fiscal policy – Government actions related to taxation and expenditure to manage aggregate demand, influence economic activity, and achieve macroeconomic objectives. •
Incomes policy – Government actions to directly influence wage and price levels, often to control inflation or manage the distribution of income. •
Price controls – Government-imposed restrictions on the prices that can be charged for goods and services, typically implemented as maximum prices (price ceilings) or minimum prices (price floors) to manage affordability or ensure minimum returns for producers. •
Price ceiling – Government-imposed maximum prices that can be charged for specific goods or services, typically set below the market equilibrium to increase affordability, potentially leading to shortages. •
Rent control – Government-imposed regulations limiting the amount landlords can charge for rental housing and the rate at which rents can be increased, typically implemented to address housing affordability •
Price floor – Government-imposed minimum price that must be charged for a specific good or service, typically set above the market equilibrium to support producers. potentially leading to surplus. •
Minimum wage – Legally required lowest hourly pay for workers, serving as a price floor for labor to protect workers against unduly low pay and ensure a basic standard of living. •
Industrial policy – proactive government-led encouragement and development of specific strategic industries for the growth of all or part of the economy, especially in absence of sufficient private sector investments and participation. •
Infrastructure-based development – development where a substantial proportion of a nation's resources must be systematically directed towards long term assets such as transportation, energy and social infrastructure in the name of long-term economic efficiency and social equity •
Investment policy – government regulation or law that encourages or discourages foreign investment in the local economy, e.g. currency exchange limits •
Monetary policy – policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability •
Disinflation – decrease in the rate of inflation – a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time •
Inflation targeting – monetary policy where a central bank follows an explicit target for the inflation rate for the medium-term and announces this inflation target to the public •
Monetary hawk and dove – someone who advocates keeping inflation low as the top priority in monetary policy (hawk) and someone who emphasizes other issues, especially low unemployment, over low inflation (dove). •
Monetary reform – movement or theory that proposes a system of supplying money and financing the economy that is different from the current system •
Quantitative easing – monetary policy action where a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity •
Reflation – return of prices to a previous rate of inflation •
Policy mix – combination of a country's monetary policy and fiscal policy. These two channels influence growth and employment, and are generally determined by the central bank and the government (e.g., the United States Congress) respectively. •
Stabilization policy – set of measures introduced to stabilize a financial system or economy (business cycle stabilization or credit cycle stabilization) •
Tax policy – guidelines and principles established by a government for the imposition and collection of taxes
Infrastructure Infrastructure – set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function.
Markets Market – composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange.
Types of markets •
Black market – clandestine market or series of transactions that has some aspect of illegality, or is not compliant with an institutional set of rules. •
Commodity market – market that trades in the primary economic sector rather than manufactured products, i.e. agricultural products, energy products, and metals. •
Financial market – market in which people trade financial securities and derivatives at low transaction costs. •
Bond market – financial market in which participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. •
Money market – component of the economy that provides short-term funds, dealing in short-term loans, generally for a period of a year or less. •
Spot market – public financial market in which financial instruments or commodities are traded for immediate delivery. •
Secondary market – financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. •
Third market – trading of exchange-listed securities in the over-the-counter (OTC) market. •
Fourth market – direct institution-to-institution trading without using the service of broker-dealers, thus avoiding both commissions and the bid–ask spread. •
Stock market – aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses. •
Free market – economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers, operating without the intervention of government or any other external authority. •
Labor market – the supply of and demand for labour or employment in a particular country or area, i.e., transactions involving the buying and selling of the ability to work. •
Mass market – market for goods produced on a large scale for a significant number of end consumers. •
Niche market – subset of the market on which a product is appealed to a small group of consumers. •
Media market – region where the population can receive the same (or similar) television and radio station offerings, and may also include other types of media such as newspapers and internet content. •
Regulated market – idealized system where the government or other organizations oversee the market, control the forces of supply and demand, and to some extent regulate the market actions.
Aspects of markets •
Market failure – situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. •
Market power – ability of a firm to influence the price at which it sells a product or service by manipulating either the supply or demand of the product or service to increase economic profit. •
Market share – percentage of the total revenue or sales in a market that a company's business makes up. •
Market structure – depicts how firms are differentiated and categorised based on the types of goods they sell (homogeneous/heterogeneous) and how their operations are affected by external factors and elements. •
Market system – systematic process enabling many market players to offer and demand: helping buyers and sellers interact and make deals. •
Market transparency – the state where much is known by many about what products and services or capital assets are available, market depth (quantity available), what price, and where. •
Market trend – upward or downward movement of a market, during a period of time. •
Market dominance – control of an economic market by a firm, which possesses the power to affect competition and influence market price
Market forms Market form •
Perfect competition, in which the market consists of a very large number of firms producing a homogeneous product. •
Monopolistic competition, also called competitive market, where there are a large number of independent firms which have a very small proportion of the market share. •
Monopoly, where there is only one provider of a product or service. •
Monopsony, when there is only one buyer in a market. •
Natural monopoly, a monopoly in which
economies of scale cause efficiency to increase continuously with the size of the firm. •
Oligopoly, in which a market is dominated by a small number of firms which own more than 40% of the market share. •
Oligopsony, a market dominated by many sellers and a few buyers.
Market-oriented activities •
Market analysis •
Marketing •
Market segmentation •
Market intelligence •
Market research Money Money – a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. •
Commodity money – money whose value comes from a commodity of which it is made. •
Currency – standardized money in common use, usually for people in a nation state. •
Hard currency – any globally traded currency that serves as a reliable and stable store of value. •
Fiat money – a type of government-issued currency that is not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity. •
Demurrage currency – a type of money that is designed to only be a temporary store of value. •
Local currency – currency that can be spent in a particular geographical locality at participating organisations. •
Petrocurrency – Dollars paid to oil-producing nations (petrodollar recycling); Currencies of oil-producing nations which tend to rise in value against other currencies when the price of oil rises; Pricing of oil in US dollars. •
Reserve currency – foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. •
Time-based currency – alternative currency or exchange system where the unit of account is the person-hour or some other time unit. •
Monetary reform – movement or theory that proposes a system of supplying money and financing the economy that is different from the current system •
Monetary system – system by which a government provides money in a country's economy •
Money supply – total volume of money held by the public at a particular point in time
Resources Resource Resource management Resource management •
Natural resource management •
Resource allocation Factors of production Factors of production Land Land •
Natural resources
Labor •
Division of labour •
Workplace Capital Capital – durable produced goods that are in turn used as productive inputs for further production of goods and services •
Capital asset – property of any kind held by an assessee •
Capital intensity – amount of fixed or real capital present in relation to other factors of production, especially labor •
Financial capital – any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based •
Human capital – concept used by economists to designate personal attributes considered useful in the production process, encompassing employee knowledge, skills, know-how, good health, and education •
Individual capital – economic view of talent, comprises inalienable or personal traits of persons, tied to their bodies and available only through their own free will •
Natural capital – world's stock of natural resources, which includes geology, soils, air, water and all living organisms •
Social capital – networks of relationships which are productive towards advancing the goals of individuals and groups. •
Wealth – abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions == Economic theory ==