David K.H. Begg, Gianluigi Vernasca-Economics-McGraw Hill Higher Education (2011)

Absolute advantage an individual, company or
country is the lowest-cost producer of a good.
Accelerator model of investment assumes that firms
guess future output and profits by extrapolating past
output growth. Constant output growth leads to a
constant level of investment. It takes accelerating
output growth to raise desired investment.
Adjustable peg a fixed exchange rate, the value of
which may occasionally be changed.
Aggregate demand the amount firms and households
plan to spend at each level of income.
Aggregate price level measures the average price of
goods and services.
Aggregate supply schedule shows the output that
firms wish to supply at each inflation rate.
Appreciation (of the exchange rate) a rise in the
international value of a currency.
Asset motive this motive for holding money reflects
dislike of risk. People sacrifice a high average rate
of return to obtain a portfolio with a lower but safer
rate of return.
Automatic stabilizers reduce the multiplier and thus
output response to demand shocks.
Average tax rate the fraction of total income paid in tax.
Balance of payments records transactions between
residents of one country and the rest of the world;
it is the sum of current account, capital and financial
account items.
Balanced budget multiplier a rise in government
spending plus an equal rise in taxes leads to higher
output.
Bank deposit multiplier the ratio of broad money to
bank reserves.
Bank reserves the money that the bank has available
to meet possible withdrawals by depositors.
Barter economy an economy in which there is no
medium of exchange; goods are swapped for other
goods.
Behavioural law a sensible theoretical relationship not
rejected by evidence over a long period.
Benefits principle the belief that people getting
most benefit from public spending should pay
most for it.
Bertrand model each firm treats the prices of rivals
as given.
Beta measures how much an asset's return moves with
the return on the whole stock market.
Broad money includes all assets fulfilling the functions
of money, and is principally bank deposits.
Budget the spending and revenue plans of an
individual, company or government.
Budget constraint the different bundles that the
consumer can afford.
Budget deficit the excess of government spending over
government receipts.
Budget share the price of a good times its price times
the quantity demanded, divided by total consumer
spending or income.
Budget surplus the excess of government spending
over government revenue.
Business cycle the short-term fluctuation of total
output around its trend path.
Capital adequacy ratio a required minimum value of
bank capital relative to its outstanding loans and
investments.
Capital controls regulations preventing private sector
capital flows between different currencies.
Capital deepening raises capital per worker for all
workers.
Capital gain the rise in a share's price while it is held.
Capital widening extends the existing capital per
worker to new extra workers.
Cash flow the net amount of money actually received
during a period.
Central bank banker to the government and to the
banks. It also conducts monetary policy.
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