Archives: Terms

Definition of U-6 (Unemployment) Rate The U-6 rate, also known as the underemployment rate, is a broader measure of unemployment that includes not only people who are unemployed and actively looking for work but also those who are working part-time but want to work full-time or have given up on […]

Definition of Tying Tying is a business practice where a company requires customers to purchase one product in order to get access to another product. This is often done to leverage the popularity or demand of one product to increase the sales of another product. Tying can be done through […]

Definition of Trough In economics, a trough is a stage in the business cycle where economic activity is at its lowest point. It marks the end of a period of economic contraction and the beginning of a period of economic expansion. During a trough, employment is low, and many businesses […]

Definition of Trimmed Mean The trimmed mean is a statistical measure of central tendency that calculates the average of a data set after removing a certain percentage of outliers from both ends. It is a way to reduce the impact of extreme values on the overall average and provide a […]

Definition of Trickle-Down Theory The trickle-down theory, also known as “trickle-down economics,” is an economic theory that suggests that policies benefiting the wealthy and large corporations will eventually benefit society as a whole. The main idea behind this theory is that by giving tax cuts and other incentives to the […]

Definition of Transfer Payment A transfer payment is a payment from one party to another without any goods or services being exchanged in return. That means it is a form of redistribution of income, where money is transferred from one individual, organization, or government entity to another. Transfer payments are […]

Definition of Transaction Costs Transaction costs are the costs associated with making and completing economic transactions. These costs include not only the monetary expenses incurred during the transaction but also any other factors that prevent the smooth execution of the transaction. Examples of transaction costs include search and information costs, […]

Definition of Tragedy of the Commons The tragedy of the commons is a concept in economics that describes a situation where individuals, acting in their self-interest, deplete or degrade a shared resource, ultimately leading to its destruction. The term “commons” refers to resources that are owned collectively or have open […]

Definition of Trade War A trade war is a situation where countries impose trade barriers, such as tariffs, on each other’s imports in an attempt to protect domestic industries and gain a competitive advantage. Trade wars often involve retaliatory measures from the affected countries, resulting in a cycle of escalating […]

Definition of Trade Surplus Trade surplus refers to a situation in which a country exports more goods and services than it imports. This leads to a positive balance of trade, as the value of exports exceeds the value of imports. Trade surpluses are often seen as favorable for a country’s […]