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econ
micro
| Term | Definition |
|---|---|
| Adjustable Rate mortgage | debt obligations for which hourses serve as the collateral and on which the lender may move the interest rate up or down by specified amounts at specified times. |
| Bond | legal contract requiring a loan to be be repaid |
| cap and trade | system for controlling pollution which assigns "pollution credit" to various producers and allows them to be bought and sold in the marketplace |
| capital (physical) | more colloquially buildings and equipment |
| Cartel | a group of independent businesses often on an international scale that agree to strict trade to their mutual benefits |
| Civil law system | a legal system in which statutes passed by legislatures and executive decrees, rather than judicial decisions based on precedent from the bases for the most legal rules |
| Common law system | legal system in which judicial decisions based on precedent, rather than executive decrees or statutes passed by legislatures. |
| common resources | a resource or product that is rival in consumption but not excludable (fish in the sea) |
| community reinvestment act (CRA) | congressional direction to mortgage lenders to provide home financing to all neighborhoods in their jurisdiction regardless of their credit risk |
| crossing the river by feeling each stone | chinese proverb used by deng xiaopeng to justify a go-slow, pragmatic approach to switching from a communist to a capitalistic economic system |
| defined benefit pension plan | employer gaurantees a certain lifetime payment which may or may not be adjusted for inflation usually based on years of service and age at retirement |
| defined contribution pension plan | employee and employer contribute a certain fraction of salary annually into a tax-deferred savings account available to pay benefits to a worker upon reaching a certain retirement age |
| direct foreign investment (DFI) | resources provided to individuals and firms in a nation by individuals or firms located in other countries often taking the form of foreign subsidiary or branch operation of parent company |
| diseconomies of scale | increases in short run average costs as more labor, capital and natural resources are used |
| economic efficiency | the maximization of output achieved from a fixed stock of resources by equating the marginal productivity (aka marginal revenue) of each resource with its marginal cost (determined by its opportunity cost in alternative uses) |
| economic growth | an increase in the size of an economy due to better technology, larger workforce, access to more natural resources or the addition of capital equipment to production, |
| equity | an allocation of resources considered "fair" according to a generally acceptable criterion of fairness |
| Externality | benefits or costs of an economic activity that spill over to a third party; pollution is a negative externality or spillover |
| Fannie Mae & Freddie mac | governemtn mortgage agencies that buy "investment grade" mortgages from issuers and package these morgages in mortgage backed securities to be sold to organizations needing relatively save long term flows of interest |
| forcloruse | a legal process by which a borrower in default under a morgage is deprived of his or her interest in the morgaged property |
| gains from trade | the extent to which individuals, firms, or nations benefit by engaging in exchange |
| game theory | branch of mathematics studying how parties behave when each faces a choice that will determine the individuals outcomes of all |
| global warming | a presumed increase in global temperature due to larger concentrations of COS and water vapor generated by human activity |
| globalization | an integration of national economies into an international economy as a result of lower trade barriers and reduced transportation communication cost |
| human capital | the accumulated training, education, and knowledge of workers |
| income elasticity of demand | a measure of the responsiveness of demand to changes in income, calculated as the percentage change in demand for a good divided by the percentage change in consumer income |
| keeling curve | a graph of CO2 concentration in the atmosphere over time |
| labor force participation rate | the sum of all people who are working or are available for and looking for work divided by the population both numerator and denominator are generally restricted to persons aged 16 or above |
| liberatarianism | political philosophy suggesting that the govt punish crimes and enforce contractors but nor redistribute income |
| monolpoly | a single supplier, a firm that faces a downward sloping demand curve for its output and therefore can choose the price which it will sell the good and example of a price researcher. |
| moral hazard | the tendency of an entity insulated from risk to behave differently than it would behave if it were fully exposed to the risk |
| mortgage | a loan to a home buyer secured by the value of the property being bought and that the buyer can pay off early without penalty |
| mortgage backed security (MBS) | a financial product that trades like a bond but is composed of a large group of individual mortgages |
| Nozickian ethics | the role of government is to ensure equal oppurtunity for all person in the education and job placement but not to ensure any preset income distribution |
| Obama care | recently passed reform to the us health insurance system designed to reach extend insurance to tall americans by eliminating the problem of preexisting conditions, mandating that all families and indviduals purchase some insurance or face tax penalty |
| obama care continues | if employers don't offer insurance to its employees then the company will face tax penalty. It also features a new tax on th wealthy to finance subsidies to poor families or small business who cannot afford health insurance |
| oligoply | a firm that is one of very few sellers (or buyers) in a market. In such case, each firm reacts to changes in the prices and quantities of its rivals |
| outsourcing | the practice of having workers located int foreign lands perform takes (typically services) that have traidtionally been perfomed by domestic workers |
| Pay as you go system | program in which current obligations are paid out of current contributions and no funds are set aide to pay future benefits (example social security) |
| Payroll tax | tax paid on all earnings under the earnings limit into social security funds used to pay old age pensions (OA funds,) survivors pensions (s funds, and disability pensions (d fund) and medicare and medicaid health benefits. |
| per capita income | a nations GDP divided by its population |
| price discrimination | selling at prices that do not reflect differences in marginal costs; different prices with the same marginal costs for example, or the same prices with different marginal costs. |
| Price elasticity of demand | the percentage change in quantity demanded divided by the percentage change in price |
| production function | relationship between the quanitty of inouts used in rooduction and quanitity of ourout produced; Y = AF (K,L,H,N) where y is real GDP, L is labor, k is capital, H is human capital and A is technology and N is natural resources |
| protectionism | the imposition of rules designed to protect certain individual or firms from competitions, usually competitions from imported goods |
| quota | a limit on the amount of a good or an acitity; often used in international trade to limit the amount of some forign good that may be imported in country |
| rawlisan ethics (sometimes referred as liberalism) | a just society is one in which someone would be willing to voluntarily be randomly inserted into from behind a veil of ignorance |
| social security | the us system of providing retirement and disability benefits financed by a tax on earnings |
| socialism | an economic system attempting to achieve a more equitable distribution of welfare by controlling market outcomes with government command and control policies |
| sub-prime mortage | a mortgage that does not meet customary standards to be considered as "imvestment grade" i.e. low risk as determined by the ratio of the value of the loan to the assessed balue of the property, the borrower's credit history, income percentage |
| tariff | a tax levied on imports |
| technological change | a change in the set of feasible production possibilities, typically the result of the productive implementation of new knowledge |
| unfunded liability | situation where an employer has not accumulated sufficient assets to pay benefits promised under a defined benefit pension plan |
| utilitarianism | political philosophy advocating the government select policies the maximize the total utility of all its citizens |
| world trade organization | a multi-lateral organization monitoring trade that replaced the general agreement of tarrifs and trade and which can impose sanctions on member nations without their agreement. |
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