Archives: Terms

Definition of Schedule A Tax Deductions Schedule A tax deductions are specific itemized deductions that taxpayers in the United States can claim on their federal tax returns, specifically using IRS Form 1040. When filling out their tax returns, taxpayers have the option to either take the standard deduction or itemize […]

Definition of Absolute Advantage Absolute advantage refers to the ability of a country, individual, or firm to produce a good or service more efficiently than competitors using the same amount of resources. This concept was first introduced by the economist Adam Smith in his seminal work, “The Wealth of Nations.” […]

Definition of Scatter Diagram A scatter diagram, also known as a scatter plot, is a graphical representation of the relationship between two quantitative variables. Each point on the scatter diagram represents an observed pair of values for the two variables. These diagrams are particularly useful for identifying and visualizing patterns, […]

Definition of Scarce Currency Clause The Scarce Currency Clause is a provision in the Articles of Agreement of the International Monetary Fund (IMF) that allows the IMF to formally designate a currency as scarce. This clause was included to manage situations where demand for a certain currency vastly outstrips supply, […]

Definition of Savings Function The savings function is an economic formula that depicts the relationship between total savings and disposable income in an economy. It is derived from the income-expenditure model and can be graphically represented. This function shows how much individuals or a population save rather than spend when […]

Definition of Savings and Loan Association Savings and Loan Associations (often abbreviated as S&Ls) are financial institutions that specialize in accepting savings deposits and making mortgage loans. They are also known for offering higher interest rates on savings accounts compared to traditional banks. Originally, their primary purpose was to provide […]

Definition of Savings Savings refer to the portion of income that is not spent on immediate consumption of goods and services. Instead, it is set aside for future use. This act of reserving income for future consumption or investment is fundamental for achieving personal financial stability and for the broader […]

Definition of Saving Ratio The saving ratio, also known as the savings rate, is a measure of the proportion of disposable income that households save rather than spend on consumption. It is usually expressed as a percentage and serves as an important indicator of economic health. A high saving ratio […]

Definition of Satisficing Satisficing is a decision-making strategy where an individual or organization seeks a satisfactory or adequate result, rather than the optimal one. This approach stems from the combination of “satisfy” and “suffice” and is often applied in scenarios where perfect information is not available, or the effort to […]

Definition of the Samuelson Rule The Samuelson Rule is a principle in economics named after the Nobel laureate Paul Samuelson. It provides a guideline for determining the optimal provision of public goods. Specifically, the rule states that the sum of the marginal rates of substitution between a public good and […]