Definition of Money Money is a medium of exchange that is used to facilitate transactions between two or more parties. That means it is a form of currency that can be used to purchase goods and services. It is typically issued by a government or other authority and is accepted […]
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Monetary Policy
Definition of Monetary Policy Monetary policy is the process by which the monetary authority of a country (i.e., usually the central bank) influences the supply of money in an economy. That means it is the set of tools and strategies used by the central banks to manage interest rates and […]
Read moreMonetary Neutrality
Definition of Monetary Neutrality Monetary neutrality (a.k.a., the neutrality of money theory) is an economic concept that states that changes in the money supply have no effect on real economic variables such as output or employment. That means, according to this concept an increase in the money supply does not […]
Read moreMicroeconomics
Definition of Microeconomics Microeconomics is the branch of economics that studies the behavior of individual economic agents, such as households, firms, and industries. That means it focuses on how these agents make decisions and how these decisions affect the market. It also looks at how the interactions between the individual […]
Read moreMenu Costs
Definition of Menu Costs Menu costs are the costs associated with changing the prices of goods and services. That means they describe the expenses that businesses have to bear when they adjust their prices in response to changes in the market. These expenses can include the costs of printing new […]
Read moreMedium Of Exchange
Definition of Medium of Exchange A medium of exchange is an item that is used to facilitate transactions between two parties. That means it is a tool that is used to buy and sell goods and services. This constitutes one of the three functions of money. In most cases, the […]
Read moreMedian Voter Theorem
Definition of Median Voter Theorem The Median Voter Theorem is an economic theory that states that in a multi-party system, the party that is closest to the median voter’s preferences will win the election. That means if voters and parties are distributed on a one-dimensional spectrum according to their preferences […]
Read moreMarket Power
Definition of Market Power Market power is the ability of a firm or an individual to influence the market price of a good or service. That means it describes the ability of a company or organization to set prices higher than the competitive level (i.e., higher than they could in […]
Read moreMonopoly
Definition of Monopoly A monopoly is a market structure in which a single firm is the sole producer and seller of a good or service. That means the firm is the only supplier in the market and therefore has no competitors. As a result, it has complete control over the […]
Read moreMoral Hazard
Definition of Moral Hazard Moral hazard is a situation in which one party has an incentive to take risks because the costs of those risks are borne by another party. That means it describes a situation in which one party is encouraged to act in a way that is not […]
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