Economics Intro Glossary
Absolute Advantage
For countries, it is when a country can produce goods and services more efficiently than another country with the same set of resources.
Absolute poverty
Not having access to basics like food, clothing, shelter and water
Appreciation
Increase in the value of an asset, specifically of a nation's currency relative to another nation's currency.
Circular flow of income
An economic model that provides a theoretical and simplified representation of operations of an economy, depicting interactions between various sectors of the economy (household, business, finance, government, foreign sectors), and flows of resources and income between them.
Coincident Indicator
Provides information about changes in the economy at the same time as a change occuring on the trade cycle.
Comparative Advantage
Ability of an economy to produce a given good or service in a more efficient and economically competitive manner than its peers.
Consumer Price Index (CPI)
Measure of the average change in the price of a selected range (basket) of consumer goods and services.
CPI Formula
CPIt = Ct/C0 *100
Consumer Protection
Legislation to provide product guarantees, warranties, trade liscenses, after sales service and fair trading legislation.
Contradiction (Downswing)
Phase of the trade cycle characterised by declining levels of business activity, income, output and employment.