Economic profit is the banks adjusted net income less preferred dividends and a charge for average invested capital. Called pe for short, this ratio reflects investors assessments of those future earnings. Consequently, economic resources are essential for. Mathematical economics is a discipline of economics that utilizes mathematic principles and methods to create economic theories and to investigate economic quandaries. Poverty defined with respect to an absolute material standard of living. Sampling is the process by which numerical values will be selected from the population. This is often thought of as a physiological or biological requirement for maintaining life, such as the need for air, water, food, shelter, and sleep. Using examples, explain the difference between a human need and a human want. The ebs building society partnered with the national adult literacy agency nala to develop a programme, which would help to target the growing issue of family and financial literacy.
Households offer labour supply to the labour market, earn income from employment and other. This activity was created by a quia web subscriber. Economics is the study of scarcity and choice scarcity means that there is a finite amount of a good or service basically they are limited. A major benefit, for the owners, of this form of business is that it provides for limited liability for its owners. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
Fiscal policy refers to the policies framed by the government in order to regulate taxation and for allocation of budgets to various departments for their functioning. The multiplier effect a construction project provides jobs and income to local workers and companies. A beneficial or adverse side effect of production or consumption. Statistics is the science of estimates and probabilities. Each term in this definitionnet value, economic goods, produced, nation is circumscribed by a wide area of reference accepted by common agreement and a substantial periphery. The annual economic survey and the annual budget list out these. Build your understanding of different economic systems with. Gross domestic product gdp is the total money value of final goods and services produced in the economic territories of a country in a given year. Scarcity and choices scarcity is how little of something is available. Economicssocial science concerned with the efficient use of limited resources to achieve maximum satisfaction of economic wants. The glossary also includes broader economic concepts relevant to health. Your pocket guide to understanding financial terms.
Basic economic principles economics l concepts l topics. Method of reporting financial activity of a business financial transactions recorded in an orderly fashion. A corporation is a form of business established as an independent legal entity, separate from the individuals who own it. Whether it is an explanation of how firms work, or people vote, or customers buy, or governments subsidise, economists have examined evidence and produced theories which can be checked against practice. Economics is a complex subject filled with a maze of confusing terms and details which can be difficult to explain. Key terms explanation production consumption land labour capital enterprise firms opportunity cost products consumers 2. Economics is the basis of our daily lives, even if we do not always realise it. A benefit or cost associated with an economic transaction which is not taken into account by those directly involved in making it. Concept of national income national bureau of economic. Economic glossary is a list of over 2,000 common economic terms definitions. These concepts are very helpful for candidates preparing for upsc civil services, ssc, ibps, appsc, tspsc, group 1, group 2, group 3, ssc, ibps, rrb, rbi and other competitive exams.
There are some basic terms that you need to know when you study economics. Basic economic terms used in india list of important. Even economists have trouble defining exactly what economics means. At the most basic, the share of each industrys sales accounted for by tourist. Opportunity cost measures the cost of any choice in terms of the next best alternative foregone. Physiological needs should be contrasted with psychological wants that make life more enjoyable but are not necessary to stay alive. Financial literacy programme a nalaebs partnership. It is anything used to satisfy a persons wants and desires.
Ib economicsintroduction to economicsbasic definitions. Deflation, keynesian economics, retail price index and institutional terms e. The economist offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them. Sample statistics, if they are unbiased, are economical ways to. This fun, illustrated article explains these terms in words you can easily understand. Supply and demand are market forces which determine the direction in which the economy moves.
This will facilitate his understanding of economic analysis. Under the broad topic of national income, you may hear terms like gdp, gnp, nnp etc. Adam smith 1723 1790 regarded as the father of modern. Because something is limited, we need to make decisions regarding how we use and allocate our resources. If the opportunity cost of producing wheat in terms of coal is constant, then the slope of the production possibilities frontier will also be constant. Accounting a system that provides quantitative information about finances. And the losses are equally important for the efficiency of the economy, because they tell the manufacturer what to stop producing.
An introduction to basic statistics and probability. Important economic terms and concepts are explained and their definitions are provided in this post. Match the key terms and economic concepts with their explanations. Learning the following basic economic terminologies and taking the short basic economics concepts quiz at the end of this article, might just earn you some brownie points in your upcoming competitive exams. Financial intermediary bank between saver and investor. Noninterest expenses as a percentage of total revenue, the efficiency ratio measures the efficiency of. Certain terms are applicable to all businesses, no matter the size.
King has defined statistics in a wider context, the science of statistics is the method of judging collective, natural or social phenomena from the results obtained by the analysis or. The opportunity cost of deciding not to work an extra ten hours a week is the lost wages foregone. No financial assets simple economy, saver and investor are the same person. A portion of the population used for statistical analysis. Basic economics supply and demand are two of the most basic concepts in economics. The following arc the basic economic tools for decisionmaking. Every science frames its concepts in unique terminology and develops its own vocabulary. We suggest you save this as a pdf and use it as a handy guide for your preparation. Assets anything of value owned by the business cash accounts receivable office equipment building real estate. Study of small economic units such as individuals, firms, and industries competitive markets, labor markets, personal decision making, etc. Concept of national income i national income an appraisal notion national income may be defined as the net value of all economic goods produced by the nation. Glossary of business terms adjective adj headwords for adjectives followed by information in square brackets only before a noun and not before a noun show any restrictions on where they can be used. The terms supply and demand are two of the most basic and most often used terms in economics, according to the economist website.
All material things produced by labor for the satisfaction of human desires and having exchange value. This means that wealth must have all of these characteristics. I have compiled a list of 27 basic business terms all teen businesses should use. Here well define the rest of the economic terms used in this course. Basic investment terms creative capital management. These notes are about basic concepts in economics that are needed in order to study issues of pricing information goods and telecommunication services. These are thus taken as guides in making decisions. If he buys the book shirt will be the opportunity cost. A bull market is a prolonged period where investment prices rise faster than their historical average, as a result of economic recovery, boom, or investor psychology. Financial assets saver and investor are different people, need. It is the true cost which is paid in an economic activity. Noun n the codes c and u show whether a noun, or a particular sense of a noun, is countable an agenda, two agendas or uncountable. Definition of need, definition at economic glossary.
The total value of goods and services produced in india for 201415 is projected to be around 100 lakh crore indian rupees or around 2. Chapter 3 basic economic concepts mit opencourseware. Gross domestic product gdp is the total economics is a tough nut to crack for many gdp, gnp, ndp, nnp, repo, reverse repo, slr, clr, crar there are many concepts to be understood. They consist of material extracted from chapters 5 and 6 of the book pricing communication networks. Basic concepts of economics in simple language clear ias. National income under the broad topic of national income, you may hear terms like gdp, gnp, nnp etc. A free market economic system is sometimes called a profit system, when it fact it is a profit and loss system. Italicized terms within the definitions are themselves defined elsewhere in the glossary, for crossreference.
Random variable a random variable is a variable whose value is a numerical outcome of a random phenomenon usually denoted by x, y or z. Basic economic terms cumulative cash position figs 9. Adas modelbasic model used to understand fluctuation in aggregate. Economics and business dictionary from the guardian, with bias towards business and finance but covering main economics concepts e. Macroeconomicsstudy of the large economy as a whole or in its basic subdivisions national economic growth, government spending, inflation, unemployment, etc. We may also said that economic resources are those means material or immaterial offering to meet certain needs of the production process or the economic activity of a company. The study of individual economic units such as households and firms. It is the cost in terms of best alternative forgone. Dictionary of economic terms edited by edward robert raupp and danna vance. Basic economics a citizens guide to the economy by thomas. Terms defined are in bold and crossreferences to definitions elsewhere in the glossary.
This article throws light upon the seventeen economic terms and their basic concepts. The primary tools used by the government along with its agencies, to regulate the financial system can be classified as i fiscal and ii monetary policy tools. Glossaries of economic terms in applied economics the. You determine the share price of the companys stock and divide it by eps to obtain the pe ratio. Good is anything which yields satisfaction to someone. Basic terms in economics it is essential that the student familiarizes himself with the terms that will be used in the study. In a sense, every university class is a foreign language class. Economic theory offers a variety of concepts which can be of considerable assistance to the managers in decisionmaking practices. Basic economic concepts course notes costas courcoubetis abstract these notes are about basic concepts in economics that are needed in order to study issues of pricing information goods and telecommunication services.
These tools are helpful for managers in solving businessrelated problems. Being the best at something does not mean that doing that thing is the best way to use your scarce economic resources. Get ready to learn more about basic terms and concepts of economics. Yet, there is no doubt that the economy and the things we learn through economics affects our everyday lives. There are strange words, like oligopsony, and words that are familiar but have different meanings to economists, like elasticity. With our economics dictionary, you look up economic definitions and increase your economic vocabulary. The price of one countrys currency in terms of anothers. Utility, economic welfare, satisfaction, and sometimes happiness these terms are often used in economics in more.