Archives: Terms

Definition of Cambridge Equation The Cambridge equation, also known as the Cambridge equation of exchange, is a fundamental concept in monetary economics that relates the money supply in an economy to nominal GDP (the total monetary value of all goods and services produced). It is represented as M*v = P*T, […]

Definition of the Cambridge Capital Controversy The Cambridge capital controversy is a pivotal debate in the history of economics, primarily between economists from the University of Cambridge, England, and those from Cambridge, Massachusetts, particularly from the Massachusetts Institute of Technology (MIT). Central to the dispute, which took place during the […]

Definition of Business Sector The business sector, also known as the private sector, comprises the portion of the economy that is run by individuals and companies for profit, as opposed to being controlled by the state. This includes businesses ranging from small family-owned shops to multinational corporations. The activities in […]

Definition of Bullionism Bullionism is an economic theory and practice prevalent in the 16th and 17th centuries that emphasized the accumulation of precious metals, such as gold and silver, as the primary measure of a nation’s wealth and power. According to bullionist thought, a country’s prosperity could be assessed by […]

Definition of Buffer Stock Scheme A Buffer Stock Scheme is an economic strategy designed to stabilize the price of commodities in the market. This is achieved by the creation of a buffer stock, which is a reserve of a particular commodity. The governing body or organization buys up the commodity […]

Definition of Budget Set A budget set, also known as an opportunity set, is a collection of all the combinations of goods and services that an individual can purchase given their income and the prices of the goods and services. Essentially, it represents the range of options an individual can […]

Definition of the Bretton Woods System The Bretton Woods System refers to a set of financial rules and institutions established in 1944, during a conference held in Bretton Woods, New Hampshire, USA. Its main goal was to provide international economic stability and prevent the competitive devaluations that contributed to the […]

Definition of Break-Even Point The break-even point in economics, business, and accounting is the stage at which total costs and total revenues are equal: there is no net loss or gain, and one has “broken even.” It’s a critical metric for business owners, managers, and investors as it provides the […]

Definition of the Brander–Spencer Model The Brander–Spencer model is a strategic trade policy concept developed by economists James Brander and Barbara Spencer. This economic model delves into the counterintuitive idea that under certain conditions, a government can enhance a nation’s welfare by using subsidies to support domestic firms in international […]

Definition of Braess’s Paradox Braess’s Paradox is a phenomenon observed in network flow problems, such as road traffic systems, where adding an extra route or increasing the capacity of the network can unexpectedly lead to longer travel times for all users. This counterintuitive outcome arises when individual drivers, acting in […]