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

Glossary
Chosen bundle the point at which an indifference
curve just touches the budget line.
Circular flow shows how real resources and financial
payments flow between firms and households.
Classical model of macroeconomics assumes wages
and prices are completely flexible.
Classical unemployment describes the unemployment
created when the wage is deliberately maintained
above the level at which the labour supply and
labour demand schedules intersect.
Closed shop an agreement that all a firm's workers will
be members of a trade union.
Collusion an explicit or implicit agreement to avoid
competition.
Command economy a government planning office
decides what will be produced, how it will be
produced, and for whom it will be produced.
Detailed instructions are then issued to households,
firms and workers.
Commercial banks financial intermediaries licensed to
make loans and issue deposits, including deposits
against which cheques can be written.
Commitment an arrangement, entered into
voluntarily, that restricts future actions.
Company an organization legally allowed to produce
and trade.
Comparative advantage an individual, company or
country has a comparative advantage compared to
another in the production of a good if they/it have
(has) a lower opportunity cost in producing it.
Comparative static analysis changes one of the 'other
things equal' and examines the effect on equilibrium
price and quantity.
Complements goods which accompany a chosen good;
a price increase for one good reduces the demand
for these complements.
Constant returns to scale long-run average costs are
constant as output rises.
Consumer price index (CPI) inflation measures the
rate of growth of an index of consumer prices.
Consumption function shows aggregate consumption
demand at each level of personal disposable income.
Contestable market has free entry and free exit.
Convergence hypothesis asserts that poor countries
grow more quickly than average, but rich countries
grow more slowly than average.
Convertible a currency is convertible if the central
bank will buy or sell as much of the currency as
people wish to trade at the fixed exchange rate.
Corporate control who controls the firm in different
situations.
Corporate finance how firms finance their activities.
Cost what is spent on production during a period.
Cost of holding money the interest given up by
holding money rather than bonds.
Cournot model each firm treats the output of the
other firm as given.
CPI inflation measures the rate of growth of an index
of consumer prices.
Credible promise a promise about the future that is
optimal to carry out when the future arrives.
Credible threat one that, after the fact, is still optimal
to carry out.
Cross-price elasticity of demand the percentage
change in the quantity of a good demanded, divided
by the corresponding percentage change in the price
of that good.
Cross-section data record, at a point in time, the way
an economic variable differs across different
individuals or groups of individuals.
Crowding out a fiscal stimulus to aggregate demand
crowds out some private spending. Higher output
induces a rise in interest rates that dampens the
expansionary effect on demand by reducing some
components of private spending.
Currency board a constitutional commitment to peg
the exchange rate by giving up monetary
independence.
Current account of the balance of payments records
international flows of goods, services and current
transfers.
Current transfers transfer payments paid across
borders.
Data pieces of evidence about economic behaviour.
Deadweight loss lost social surplus by producing the
wrong output level.
Deflation negative inflation, when the price level is
falling.
Demand the quantity that buyers wish to purchase at
each conceivable price.
Demand curve shows the relationship between price
and quantity demanded, other things equal.
Demand-deficient unemployment occurs when
output is below full capacity.
Demand-determined output since markets trade
the smaller of supply and demand, output is
demand-determined when there is excess supply
and wages and prices have yet to adjust to restore
long-run equilibrium. Output then depends only
on aggregate demand.
Demand elasticity demand is elastic if the price
elasticity is more negative than -1.
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