Archives: Terms

Definition of Rational Expectations Theory The rational expectations theory is an economic concept that suggests that individuals make predictions about future events and outcomes based on all available information. This theory assumes that individuals are rational and use all relevant information to form their expectations. It also suggests that individuals […]

Definition of Rational Choice Theory Rational Choice Theory is an economic principle that assumes individuals make rational decisions by weighing the costs and benefits of different alternatives. It suggests that individuals always act in their own self-interest and choose the option that maximizes their personal utility or satisfaction. Example To […]

Definition of Rational Behavior Rational behavior refers to the decision-making process in which individuals or organizations make choices that maximize their own self-interest. It is based on the assumption that individuals weigh the costs and benefits of different options and make decisions that will bring them the greatest satisfaction or […]

Definition of Race to the Bottom Race to the bottom refers to a situation where there is fierce competition among countries or regions to attract businesses by offering lower costs, lower taxes, fewer regulations, or other incentives. This race creates a downward pressure on standards and conditions for workers, consumers, […]

Definition of Quota A quota is a policy tool used by governments to restrict or regulate the quantity of goods or services that can be imported or exported in a given time period. It is a form of trade restriction that sets a specific limit on the quantity of a […]

Definition of Quintiles Quintiles are statistical divisions of a distribution into five equal parts. These parts are used to analyze income or wealth inequality, as they provide a way to understand how resources are distributed among different segments of a population. Each quintile represents 20% of the total, with the […]

Definition of Quality of Life Quality of life is a measure of well-being and satisfaction with various aspects of one’s life. It encompasses a wide range of factors that contribute to an individual’s overall happiness and fulfillment. These factors include physical and mental health, access to basic necessities, social relationships, […]

Definition of Purchasing Power Purchasing power refers to the ability of a consumer to buy goods and services with a given amount of money. It is essentially a measure of the value that money holds in terms of what it can purchase. Purchasing power is affected by various factors such […]

Definition of Pump Priming Pump priming, also known as fiscal stimulus, refers to the use of government spending or tax cuts to stimulate economic growth and increase aggregate demand. The term “pump priming” is derived from the analogy of priming a pump, where additional water or air is pumped in […]

Definition of Public Good Public goods are goods or services that are non-excludable and non-rivalrous in nature. Non-excludability means that once the good or service is provided, it is difficult or impractical to exclude individuals from using or benefiting from it. Non-rivalry means that the consumption of the good or […]