WEALTH
The stock of financial and non-financial assets a person or a household owns that have monetary value.
SALARY
An annual rate of pay, often paid to employees in professional and other non-manual occupations.
DISPOSABLE INCOME
Personal income remaining to spend or save after direct income taxes have been deducted from it.
SAVING
Deferred consumption or the accumulation of wealth.
DISSAVING
Withdrawing or spending from savings, for example to meet living expenses when income is not sufficient.
SAVINGS RATIO
Total savings in an economy as a percentage of total disposable income.
INVESTMENT
The purchase of productive assets by firms or individuals.
DIVERSIFICATION
Producing a range of different products for different home and/or overseas markets to spread market risks or buying different types of assets to minimize risk.
MEDIUM OF EXCHANGE
Any good or commodity generally accepted and used as a money in exchange for other goods or services.
VELOCITY OF CIRCULATION
The number of time the fixed amount of notes and coins in an economy are exchanged between different people and firms on average over a given period of time.
UTILITY
The satisfaction a person gains from consuming a good or service.
NEEDS
Human requirements for life and survival.
MORTGAGE
A long-term loan for buying property.
MULTIPLIER EFFECT
An effect in economics in which a change in spending produces a subsequent change in output and income greater and more widespread than the initial change in expenditure.
DEFAULT
A term used to describe a situation when a person, firm or government fails to meet their loan repayments on time.
INSOLVENT
A term referring to people or organizations unable to pay off their debts.
DEREGULATION
The simplification or removal of complex, old or even unnecessary laws and regulations to reduce burdens on business organizations.
EMBARGO
A ban introduced by one or more countries on the importation of a specific product or all products from another country.
SPECIALIZATION
Production involving employees or organizations each concentrating their productive efforts on limited range of tasks or products.
PROTECTIONISM
The use of trade barriers by governments to protect their domestic industries and employment from global competition.
BREAK-EVEN LEVEL OF OUTPUT
That volume of output which, if completely sold, would raise a total revenue exactly equal to the total cost of its production.
DIVISION OF LABOUR
The separation of a production process into a series of tasks, with each one completed by a different worker or group of employees.
PRODUCTION POSSIBILITY CURVE
A graph of the combined maximum possible output of two products an economy can produce efficiently with existing resources and technology. It shows how much of one product must be given up to produce more of the other.
PRODUCTS
The outputs from productive activities, and an economics term also used to collectively describe goods and services.
TRANSFER PAYMENTS
Payments made by a government to individuals, usually through a social welfare programme, including unemployment benefits, disability allowances and old-age pensions. They are ‘transfers’ because they do not involve payment for goods or services and are paid to people who are not engaged in productive activities from tax revenues paid by people and businesses that are economically active.
