Definition of Austerity Austerity is a set of economic policies that involve reducing government spending and increasing taxes in order to reduce a government’s budget deficit. These policies are typically implemented in times of economic hardship, such as during a recession or a financial crisis, in order to address and […]
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Autarky
Definition of Autarky Autarky is a state of self-sufficiency in which an economy or country does not trade with other countries. That means it produces all the goods and services it needs without relying on imports or exports. Autarky can be intentional, but it can also be the result of […]
Read moreAutomatic Stabilizer
Definition of Automatic Stabilizer Automatic stabilizers are government policies that automatically adjust to changes in the economy and act as a stabilizing force. That means they help offset fluctuations in economic activity without requiring any action from policymakers. Some of the most common types of automatic stabilizers include transfer payments, […]
Read moreAutonomous Consumption
Definition of Autonomous Consumption Autonomous consumption refers to the level of consumption by individuals or households that does not depend on their income level. That means it represents the minimum level of consumption that people undertake, regardless of their income levels. The term “autonomous” means that the consumption is independent […]
Read moreAverage Propensity To Consume
Definition of Average Propensity to Consume The Average Propensity to Consume (APC) is a measure that describes the fraction of total income that a household or an individual consumer spends on consumption of goods and services. It represents the relationship between consumer spending and total income. Example For example, consider […]
Read moreBaby Boomer
Definition of Baby Boomer Baby Boomers are individuals born between 1946 and 1964 during the post-World War II baby boom. This generation represents a significant demographic cohort in terms of the number of people born and the impact it has had on society. Example To give an example of the […]
Read moreBalance Of Payments (BOP)
Definition of Balance of Payments (BOP) Balance of Payments refers to the systematic record of transactions made between residents of a country and the rest of the world over a specific period. It consists of three main components: 1) current account, which records transactions related to a country’s imports, exports, […]
Read moreBalance Of Trade (BOT)
Definition of Balance of Trade Balance of Trade (BOT), simply known as trade balance, is the difference between a country’s total exports and imports over a specified period. The balance of trade reflects the country’s net income from international trade in goods and services. Example Let’s imagine a country called […]
Read moreBandwagon Effect
Definition of Bandwagon Effect The bandwagon effect describes a psychological phenomenon where people assume the beliefs or behaviors of others in a group rather than making an independent decision. This effect arises when people believe that others in their social circle may have more knowledge or information than they do, […]
Read moreBarriers To Entry
Definition of Barriers to Entry Barriers to entry refer to obstacles that make it difficult or expensive for new companies to enter an industry or market. These barriers can be legal, financial, technical, or due to other factors that limit the ability of new competitors to establish a foothold. Example […]
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