Games
Learn
Atlas
Learn Economic theory
Learn
Learn
Economics glossary
308 economics terms, each defined in plain English with an example and a question to test yourself, and linked to the module that teaches it. Built around the A-level, GCSE and IB specifications.
A B C D E F G H I L M N O P Q R S T U V W By topic
36 A to Z
A Absolute advantage A country has an absolute advantage over another country in producing a good if it uses fewer resources to… Absolute poverty Absolute poverty is having an income below the level a person needs for a basic standard of living, such as… Accounting profit Accounting profit is total revenue minus explicit costs only, the difference between the money brought in and… Acquisition An acquisition is when one firm purchases another, which may carry on operating under its former company name. Ad valorem tax An ad valorem tax is an indirect tax charged as a percentage of the price of a good, so it takes more in… Adverse selection Adverse selection is the problem in which insurance buyers know more about whether they are high-risk or… Aggregate demand Aggregate demand is the total spending on a country's domestically produced goods and services at each price… Aggregate supply Aggregate supply is the total quantity of output, or real GDP, that firms will produce and sell at each price… Appreciation Appreciation is a rise in the value of a currency in terms of other currencies, which is also called… Asymmetric information Asymmetric information is a situation in which the two parties to an economic transaction have unequal… Automatic stabilisers Automatic stabilisers are tax and spending rules already in law that stimulate aggregate demand in a… Availability of inputs Availability of inputs is how easily producers can get more of what a good is made from: readily available… Availability of substitutes Availability of substitutes is how easily buyers can switch to a similar good; the closer and more plentiful… Average cost Average cost is total cost divided by the quantity of output produced, the cost on average of each unit made. B Balance of trade The balance of trade is the gap, if any, between the value of a nation's exports and its imports. Bank capital Bank capital is a bank's net worth, equal to the value of its assets minus the value of its liabilities. Bank regulation Bank regulation is the set of rules intended to keep banks solvent by stopping them from taking excessive… Barriers to entry Barriers to entry are the legal, technological or market forces that discourage or prevent potential… Base year The base year is the year whose prices you use to work out the real figure. Behavioural economics Behavioural economics is the study of decision-making that brings the insights of psychology into economics. Binding price floor A price floor is binding when it sits above the equilibrium wage and so determines the market outcome. Bounded rationality Bounded rationality is deciding within limits of information, time and the ability to process it, so people… Bounded self-control Bounded self-control is having less than the complete self-control the model assumes, so people give in to… Budget deficit The budget deficit is the amount by which government spending exceeds tax revenue over one year, and so what… C Capital Capital is physical capital, the machines, equipment and buildings used to produce the product, and its… Capital requirements Capital requirements make a bank keep a minimum net worth, usually set as a share of its assets, to protect… Cheaper imports Cheaper imports are the lower prices and wider choice that consumers in rich countries gain when goods are… Circular flow of income The circular flow of income is a model of the economy in which households sell labour and other resources to… Collective bargaining Collective bargaining is the negotiation between a union and one or more firms over pay and conditions. Command economy A command economy is one where economic decisions are passed down from government authority and the… Common market A common market is a customs union that also removes barriers to the movement of labour and capital between… Comparative advantage A country has a comparative advantage in a good when it can produce it at a lower cost in terms of other… Compensating differential A compensating differential is the extra pay a job must offer to attract enough workers because it is… Competition policy Competition policy is the body of law that promotes competition between firms, including the power to block… Complements Complements are goods often used together, so a higher price for one lowers the quantity demanded of the… Conglomerate integration Conglomerate integration is a merger between firms that are involved in totally unrelated business activities. Consumer surplus Consumer surplus is the amount individuals would have been willing to pay, minus the amount they actually… Consumption Consumption is spending by households on goods and services for their own use, and it is the largest… Corporation tax Corporation tax is based on company profits, so receipts rise automatically as profits grow in a boom and… Cost of inputs The cost of inputs is what a firm pays for labour, materials and machinery; a rise cuts profit at every… Cost-push inflation Cost-push inflation is a rise in the price level caused by higher input prices, such as oil or labour, across… Current account balance The current account balance is a broad measure of a country's trade that includes goods and services as well… Customs union A customs union is a free trade area whose members also charge one common external tariff on imports from… Cyclical deficit The cyclical deficit is the part of the deficit caused by a weak economy, as tax receipts fall and welfare… Cyclical unemployment Cyclical unemployment is the rise in unemployment that occurs because of a recession, when firms want less… D Deadweight loss Deadweight loss is the loss in social surplus that occurs when an economy produces at an inefficient quantity. Deindustrialisation Deindustrialisation is the fall in manufacturing's share of output and jobs, driven in part by factory work… Demand Demand is the amount of a good or service consumers are willing and able to purchase at each price. Demand for labour The demand for labour is the quantity of labour employers wish to hire at each wage, other things being equal. Demand-pull inflation Demand-pull inflation is a rise in the price level caused by aggregate demand growing faster than the… Demand-side policy Demand-side policy is fiscal or monetary policy used to shift aggregate demand so that output moves towards… Demerit good A demerit good is a good that a free market over-consumes, because buyers underestimate its harm to… Depreciation Depreciation is a fall in the value of a currency in terms of other currencies, which is also called… Derived demand Derived demand is the demand for an input such as labour, which depends on the demand for the product the… Discouraged worker A discouraged worker is someone who wants a job and could take one, but has stopped looking because they… Discretionary fiscal policy Discretionary fiscal policy is a deliberate government decision that explicitly changes the level of taxes or… Diseconomies of scale Diseconomies of scale describe the situation where, as the level of output and the scale rise, average costs… Division of labour The division of labour is splitting the production of a good or service into separate tasks, each done by… E Earnings gap An earnings gap is a difference between the average wages of two groups, which on its own does not prove… Economic good An economic good is one that is scarce, because making more of it uses resources that could have produced… Economic growth Economic growth is a rise in real GDP, reported as the percentage change in real GDP from one period to the… Economic profit Economic profit is total revenue minus total cost, including both explicit and implicit costs. Economically inactive An economically inactive person is out of paid work and either has not looked for a job in the past four… Economies of scale Economies of scale describe the situation where, as a firm's quantity of output goes up, its cost per unit… Education The education dimension measures knowledge, using mean years of schooling for adults and expected years of… Elastic demand An elastic demand is one in which the elasticity, ignoring its minus sign, is greater than one, showing a… Enterprise Enterprise is the entrepreneur, the person who creates the business and combines the other inputs, and its… Equilibrium price Equilibrium price is the only price where the plans of consumers and the plans of producers agree. Equilibrium quantity Equilibrium quantity is the amount bought and sold at that price, where quantity demanded equals quantity… Equilibrium wage The equilibrium wage is the wage at which the quantity of labour supplied equals the quantity demanded, so… Excess supply of labour An excess supply of labour arises when the wage sits above equilibrium, so more people want jobs than… Exchange rate An exchange rate is a price: the price of one currency expressed in terms of units of another currency. Expansionary fiscal policy Expansionary fiscal policy increases aggregate demand through higher government spending or lower tax rates… Expectations Expectations are what buyers believe about future prices, incomes or events, which can change how much they… Explicit costs Explicit costs are out-of-pocket costs, the actual payments a firm makes, such as the wages it pays its staff… External benefit External benefits are the benefits of a good that go to third parties, who do not pay for them; per unit… External cost External costs are the costs of production that fall on third parties, unpaid by the firm; per unit, they are… F Factors of production Factors of production are the inputs, grouped as land, labour, capital and enterprise, that a firm combines… Financial capital Financial capital is money raised through loans and equity investments, which pays for inputs and produces… Financial economies Financial economies are savings on borrowing, because lenders see a large firm as safer and charge it a lower… Fiscal policy Fiscal policy is the use of government spending and tax policy to influence the path of the economy over time. Fixed costs Fixed costs are expenditures that do not change regardless of the level of production, because the fixed… Fixed exchange rate A fixed exchange rate, or hard peg, is a policy in which the central bank sets a fixed value for the exchange… Floating exchange rate A floating exchange rate is a policy in which a country lets the foreign exchange market determine the value… Foreign exchange market The foreign exchange market is the market in which people or firms use one currency to purchase another… Free entry and exit Free entry and exit means firms can enter and leave the market without any restrictions, such as licences or… Free good A free good is one that is not scarce, because there is enough to meet every want at a zero price, so using… Free rider problem The free rider problem is when people have an incentive to let others pay for a good and then use it without… Free trade Free trade is trade in which countries allow each other's imports without tariffs, quotas or other barriers… Free trade area A free trade area is an agreement in which members allow each other's imports without tariffs or quotas… Frictional unemployment Frictional unemployment is the unemployment that results from people moving between jobs, while they learn… Full employment Full employment is when the actual unemployment rate equals the natural rate, so some people are still out of… G Gain from trade A gain from trade is the extra a country can consume, beyond what it could produce on its own, as a result of… GDP per head GDP per head is the value of a country's gross domestic product divided by the number of people who live… Globalisation Globalisation is the expanding cultural, political and economic connections between people around the world… Government failure Government failure is government intervention that itself results in an inefficient allocation of resources… Government policy Government policy shifts labour supply through the qualifications it requires, the training it pays for, and… Government regulation Government regulation can raise or lower the demand for labour at any wage, by requiring certain workers for… Government spending Government spending is the government's purchases of goods and services produced in the economy, which leaves… Gross domestic product Gross domestic product is the value of all final goods and services produced within a country in a given year. Gross national product Gross national product is the value of what a country's citizens and firms produce, wherever in the world… H Health The health dimension measures a long and healthy life, using life expectancy at birth. Hidden economy The hidden economy is cash-in-hand work and illegal sales, which belong in GDP but largely go unrecorded… Home production Home production is work done at home that is not sold in the marketplace, such as cooking your own breakfast… Horizontal integration Horizontal integration is a merger or acquisition joining two firms at the same stage of production in the… I Identical products Identical products means every firm sells the same good, so buyers have no reason to pay one firm more than… Imperfect information Imperfect information is when buyers or sellers do not have all the information necessary to make an informed… Implicit costs Implicit costs are the opportunity cost of using resources the firm already owns, often ones its owner… Import quota An import quota is a numerical limit on the quantity of a product that a country can import. Imports Imports are spending on goods and services made abroad, which becomes revenue for foreign firms rather than… Incentive function The incentive function is the way a higher price makes extra output profitable, so producers are rewarded for… Incentives to innovate Firms in a market economy keep the profit from a better or cheaper product, rewarding invention and… Income Income is what buyers have to spend: a rise shifts demand for a normal good to the right and demand for an… Income tax Income tax is based on personal income, so receipts rise automatically when pay rises in a boom and fall when… Indirect tax An indirect tax is a tax on spending on goods and services, collected from producers, such as VAT or excise… Inelastic demand An inelastic demand is one in which the elasticity, ignoring its minus sign, is less than one, showing a low… Inferior good An inferior good is one for which the quantity demanded falls as income rises and rises as income falls, so… Inflation rate The inflation rate is the percentage change in the price level from one period to the next. Information gaps An information gap is when the government lacks what it needs to know, such as the true external cost, and… Intermediate goods Intermediate goods are goods that go into producing other goods, left out as separate items so that their… Investment Investment is spending on new physical capital, such as factories, machinery and equipment, mainly by… L Labour Labour is human effort, both physical and mental, used in production, and its reward is wages and salaries. Labour market A labour market is the market for one type of labour, defined by the kind of work, the skill level and the… Land Land is natural resources, meaning land itself and raw materials such as water, timber and gas, and its… Leakage A leakage is any part of income that is saved, paid in taxes or spent on imports rather than on domestic… Legal protection Legal protection is a law that prohibits or severely limits competition in a market, so the barrier is the… Line of perfect equality The line of perfect equality is the diagonal where the bottom forty per cent of people get forty per cent of… Liquidity requirements Liquidity requirements make a bank hold enough cash and assets it can sell quickly to meet a rush of… Living standards The living standards dimension measures command over resources, using gross national income per head at… Long-run aggregate supply Long-run aggregate supply is potential GDP, the output an economy can produce by fully employing its labour… Long-term planning A government that owns the resources can direct them at long-run goals, such as railways or power stations… Loose monetary policy Loose, or expansionary, monetary policy lowers interest rates and stimulates borrowing, so investment and… Lorenz curve A Lorenz curve is a graph comparing the cumulative share of income actually received with a perfectly equal… Loss aversion Loss aversion is focusing more on a loss than on an equal gain, so that losing a sum pains people more than… Luxury good A luxury good is a normal good whose income elasticity is greater than one, so the quantity demanded rises… M Managed exchange rate A managed exchange rate, or soft peg, is a policy in which the market usually sets the rate, but the central… Managerial economies Managerial economies are savings from hiring specialist managers, each doing one job well, which a small firm… Many buyers and sellers Many buyers and sellers means so many firms and customers that no single one can move the market price by… Marginal cost Marginal cost is the additional cost of producing one more unit of output, the change in total cost divided… Marginal revenue Marginal revenue is the additional revenue gained from selling one more unit, the change in total revenue… Marginal revenue product The marginal revenue product of labour is the marginal product of one more worker multiplied by the marginal… Market economy A market economy is one where economic decisions are decentralised, private individuals own resources, and… Market failure Market failure is a situation where the free market, left to its own devices, is unable to achieve optimal… Market power Market power is a firm's ability to set its own price rather than take the market price as given, as a price… Marketing economies Marketing economies are savings from spreading one advertising campaign across far more sales, so it costs… Medium of exchange A medium of exchange acts as an intermediary between buyer and seller, so people sell goods and services for… Mental accounting Mental accounting is putting money into different mental categories where it takes different values, rather… Merger A merger is when two formerly separate firms combine to become a single firm, operating from then on under… Merit good A merit good is a good that a free market under-consumes, because buyers underestimate its benefit to… Minimum wage A minimum wage is a price floor that makes it illegal for an employer to pay less than a set hourly rate. Monetary policy Monetary policy is a central bank's management of interest rates and credit conditions to influence the level… Money Money is what people regularly use when buying or selling goods and services, and so both buyers and sellers… Money multiplier The money multiplier is the number of pounds of deposits the banking system creates from each pound of… Monopolistic competition Monopolistic competition is a market in which many firms compete against each other, each selling a product… Monopoly A monopoly is a market in which one firm produces all of the output, so it faces no significant competition. Monopsony A monopsony is a labour market in which there is only one employer, so workers who want that kind of job must… Moral hazard Moral hazard is the case when people engage in riskier behaviour with insurance than they would if they did… More competition More competition from foreign firms pushes home firms to cut costs, raise quality and innovate, or lose sales. More equal distribution A command economy decides who gets what, so it can share out essentials such as housing and healthcare more… Multiplier The multiplier is the ratio of the final change in real GDP to the initial change in spending that caused it. N National debt The national debt is the total amount that the government has borrowed over time and has not yet repaid. Natural conditions Natural conditions are the weather, climate and natural disasters that change what it costs to grow or… Necessity A necessity is a good buyers feel they cannot do without, such as housing or electricity, so its demand is… Negative externality A negative externality is a cost that an exchange between a buyer and a seller imposes on a third party who… Net exports Net exports are exports minus imports, so they add to aggregate demand when exports are larger and reduce it… No resale No resale means buyers who pay the low price cannot sell the product on to those charged the high price, or… Nominal A nominal figure is measured in the actual prices that existed at the time it was recorded. Non-excludability Non-excludability means it is costly or impossible to exclude someone from using the good, whether or not… Non-rivalry Non-rivalry means that when one person uses the good, another can also use it, so one person's use leaves no… Normal good A normal good is one for which the quantity demanded rises as income rises and falls as income falls, so its… Normal profit Normal profit is the minimum profit an owner must expect to earn to keep their resources in the business, and… Normative statement A normative statement describes how the world should be, and rests on values that no evidence can prove true… Number of workers The number of workers is the pool of people who could offer their labour, which grows with population… O Oligopoly Oligopoly is a market in which a small number of large firms have all or most of the sales in an industry. Opportunity cost Opportunity cost is what a person must give up in order to obtain what they want. Organic growth Organic growth is a firm expanding from within, by opening new sites, hiring staff or launching products… Out-of-work benefits Out-of-work benefits are paid under rules already in law to people who lose their jobs, so spending on them… P Patent A patent gives the inventor the exclusive legal right to make, use or sell the invention for a limited time. Perfect competition Perfect competition is a market where many firms sell identical products to many buyers, everyone has all… Perfect information Perfect information means sellers and buyers have all the relevant information to make rational decisions… Phillips curve The Phillips curve shows a trade-off between the unemployment rate and the inflation rate, so that when one… Pollution charge A pollution charge is a tax imposed on the quantity of pollution that a firm emits. Positive externality A positive externality is a benefit that spills over from an exchange to a third party, who enjoys it without… Positive statement A positive statement describes the world as it is, and can be tested against evidence, at least in principle. Potential growth Potential growth is a rise in potential GDP, the output an economy can produce by fully employing its labour… Predatory pricing Predatory pricing is when a firm cuts its prices sharply, often below its own average cost, or threatens to… Price cap regulation Price cap regulation is where a regulator sets the price that a firm with market power can charge over the… Price ceiling A price ceiling is a legal maximum price that buyers pay for a good or service. Price discrimination Price discrimination is charging different customers different prices for the same product, where the gap… Price elasticity of demand The price elasticity of demand is the percentage change in the quantity demanded of a good divided by the… Price elasticity of supply The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change… Price floor A price floor is the lowest price that buyers can legally pay for a good or service. Price index A price index is a number measuring the average prices of a set of goods and services over time. Price level The price level is a single figure that combines the prices of the many goods and services people buy. Price mechanism The price mechanism is the way demand and supply answer what is produced, how it is produced and for whom it… Price signals Prices move as goods become scarcer or more plentiful, telling firms in a market economy what to make without… Price taker A price taker is a firm that the pressure of competing firms forces to accept the prevailing equilibrium… Prices of related goods The prices of related goods are those of substitutes and complements: a dearer substitute shifts demand… Primary income Primary income records income that residents earn abroad, mainly returns on investments and pay for work… Private benefit Private benefits are the part of the benefit of a good that goes to the buyer or the seller themselves. Private cost Private costs are the costs of production that a firm itself incurs and pays, such as its labour and material… Private good A private good is a separate and identifiable item that can be bought and sold, like a slice of pizza. Producer surplus Producer surplus is the price a producer actually received, minus the price it would have been willing to… Product differentiation Product differentiation is making a product distinctive from its competitors' through its physical features… Productive efficiency Productive efficiency is when it is impossible to produce more of one good or service without decreasing the… Productivity of labour The productivity of labour is the output each worker produces, and a better-trained, more productive… Protectionism Protectionism is government policy to reduce or block imports, often to shield domestic producers and workers… Public good A public good is non-excludable and non-rival, so nobody can be kept from using it and one person's use… Purchasing economies Purchasing economies are savings from buying inputs in bulk, which wins the firm a lower price per unit from… Q Quantity demanded Quantity demanded is the amount bought at one particular price, a single point on the demand curve. Quantity supplied Quantity supplied is the amount offered at one particular price, a single point on the supply curve. Quasi-public good A quasi-public good has only some of the characteristics of a public good, because one of the two tests fails… R Rationality Rationality means that people take all the available information and make consistent, informed decisions that… Rationing function The rationing function is the way a rising price shares out a scarce good among the buyers most willing and… Real A real figure is the same figure after it has been adjusted for inflation. Real-wage unemployment Real-wage unemployment, or classical unemployment, arises when real wages are held above the market-clearing… Regulatory barrier A regulatory barrier is any rule, standard, inspection or paperwork a nation draws up to make importing… Regulatory capture Regulatory capture is when the industry being regulated comes to exercise influence over its regulators, so… Relative poverty Relative poverty is having an income below a set percentage of the median income in one's own country, so the… Required education Required education is the schooling and training a job demands, and the more a job requires, the lower the… Reserve requirement The reserve requirement is the proportion of its deposits that a bank must hold rather than lend. Resolution regime A resolution regime lets the authorities deal with a failing bank in an orderly way, keeping its critical… Ring-fencing Ring-fencing separates core retail banking services from investment banking at the largest banks, to protect… S Saving Saving is the part of income that households neither spend nor pay in tax, so it buys no output this round. Scarcity Scarcity means that human wants for goods, services and resources exceed what is available to satisfy them. Seasonal unemployment Seasonal unemployment is unemployment that comes and goes at the same time each year, as demand for some… Secondary income Secondary income records transfers, which are payments sent abroad or received without any direct good or… Separable groups Separable groups are buyers the firm can sort by their price elasticity of demand and tell apart, so it can… Share of income Share of income is the proportion of a buyer's income spent on a good; the smaller it is, the less a price… Shift in demand A shift in demand means that at every price the quantity demanded is different from what it was before. Shift in supply A shift in supply means a change in the quantity supplied at every price. Short-run aggregate supply Short-run aggregate supply is the total output firms will produce at each price level while the prices of… Shortage A shortage, also called excess demand, is when the quantity demanded exceeds the quantity supplied at the… Signalling function The signalling function is the way a change in price tells buyers and sellers that a good has become scarcer… Slope The slope is the rate of change in units along the curve, the change in price over the change in quantity. Social benefit Social benefits are all the benefits of a good to society: the private benefits to the buyer plus the value… Social cost Social costs are the full costs of production to society: the private costs a firm incurs plus the external… Spare capacity Spare capacity is machinery, space and labour a firm already has but is not fully using, so output can rise… Specialisation Specialisation is when a person, firm, region or country concentrates on the tasks or products it is best… Specific tax A specific tax is an indirect tax of a fixed sum on each unit sold, whatever the price of that unit. Stagflation Stagflation is an unhealthy combination of high unemployment and high inflation at the same time. Standard of living The standard of living includes all the elements that affect people's well-being, whether they are bought and… Stocks Stocks are finished goods held in a warehouse, which a firm can release onto the market at once when the… Store of value A store of value holds its value over time, so money kept today will still buy goods and services tomorrow or… Structural deficit The structural deficit is an estimate of the deficit if the economy were at a normal, sustainable level of… Structural unemployment Structural unemployment is unemployment among people who lack the skills the labour market values, often… Subsidies A subsidy is a government payment to a firm, or a cut in its taxes, for carrying out certain actions, which… Subsidy A subsidy is a payment from the government to a firm, made directly or through lower taxes, when the firm… Substitutes Substitutes are goods that can replace each other to some extent, so a higher price for one raises the… Sunk cost A sunk cost is a cost incurred in the past that cannot now be recovered. Supernormal profit Supernormal profit is any profit above normal profit, where total revenue exceeds total cost including both… Supply Supply is the amount of a good or service a producer is willing to supply at each price. Supply of labour The supply of labour is the quantity of labour workers are willing to offer at each wage, trading paid work… Supply-side policy Supply-side policy is government action to raise potential GDP by increasing the quantity or productivity of… Surplus A surplus, also called excess supply, is when the quantity supplied exceeds the quantity demanded at the… T Tariff A tariff is a tax that a government places on imported goods and services, which makes imports more expensive… Tastes and preferences Tastes and preferences are how much buyers want a good, which changes with fashion, health news and habit. Tax incidence Tax incidence is the way the burden of a tax is divided between the consumers and the producers of the taxed… Tax wedge The tax wedge is the gap a tax opens between the price consumers pay and the price producers receive, equal… Taxation Taxation is money paid to the government out of income or spending, which households therefore cannot spend… Taxes and regulations Taxes and regulations are costs a government places on producers, such as a duty on each unit or rules they… Technical economies Technical economies are savings from larger plant and machinery: bigger, more specialised equipment turns out… Technology Technology is the methods used to turn inputs into output; an improvement lowers the cost of each unit, so a… Tight monetary policy Tight, or contractionary, monetary policy raises interest rates and reduces borrowing, so firms invest less… Time period The time period is how long buyers have to respond; demand is usually more elastic in the long run, once they… Total revenue Total revenue is the income a firm generates from selling its products, the price of the product times the… Tradable pollution permit A tradable pollution permit allows a firm to emit a set quantity of pollution, and firms can buy and sell… Trade in goods Trade in goods records exports and imports of physical items, the things that ships, planes, trains and… Trade in services Trade in services records exports and imports of services, such as finance, law, software and tourism, which… Trade union A trade union is an organisation of workers that negotiates with employers over wages and working conditions. Trading bloc A trading bloc is a regional agreement between pairs or groups of countries to reduce tariffs, import quotas… Transfer payments Transfer payments are payments by the government to individuals, such as pensions and benefits, left out… Transmission mechanism The transmission mechanism is the chain by which a central bank's interest-rate change works through… U Underemployment Underemployment is working fewer hours than you want, or in a job below your skills, while being counted as… Unemployed An unemployed person is someone without a job who has actively looked for work in the previous four weeks and… Unintended consequences Unintended consequences are effects of a policy that its makers did not plan, as people respond in unexpected… Unit of account A unit of account is the ruler by which values are measured, so the prices of very different things can be… Used goods Used goods are goods sold again after their first sale, left out because they were produced in an earlier… V Variable costs Variable costs are the costs of the variable inputs, such as labour and raw materials, so they increase or… Vertical integration Vertical integration is a merger of firms operating at different levels within an industry's supply chain… W Wealth Wealth is the total value of everything a person owns, from savings and shares to a house, after taking away… Wider export markets Wider export markets let firms in rich countries sell to fast-growing economies abroad, which helps them… WTO The WTO, or World Trade Organization, is the main international body through which nations negotiate their…