| A | B |
|---|
| Accident Compensation | A New Zealand insurance scheme which provides set compensation for accident victims and removes the right to sue for negligence. |
| Accounting Costs: | Money costs incurred in producing output. |
| Aggregate Demand: | Total demand in an economy, made up of Consumption, Investment and Government spending plus net exports. AD = C + I + G + (X - M). |
| Aggregate Supply: | The total output of an economy at a series of general price levels. |
| Allocate: | To distribute or ration. |
| Allocating Resources | Resources are distributed to making goods and services by derived supply and demand. |
| Allocative Efficiency | The greatest amount of satisfaction for both consumer and producer is at equilibrium, where resources are allocated for maximum benefit. Allocative efficiency is the sum of the consumer's surplus and the producers' surplus. |
| Asset: | Something of monetary value owned. |
| Assets Motive | The desire to hold money as a store of wealth. |
| Autonomous | Acting without regard to any governing force or flow. |
| Average Costs | Average Fixed Cost plus Average Variable Cost. |
| Average Fixed Cost | Total Fixed Cost divided by units of output. |
| Average Revenue | Total revenue divided by quantity sold. |
| Average Variable Cost | Total Variable Cost divided by units of output. |
| Balance of Merchandise Trade | The trade in goods (visibles), in the current year. Part of the Current Account. |
| Balance of Payments | The set of national accounts measuring overseas trade |
| Balance on Current Account | The total of the balance on Merchandise Trade plus Balance on Invisibles. |
| Balance on Invisibles | The Balance on Services plus net international investment income and net transfers. |
| Balance on Services | The balance of the value of the export of services minus the import of services. |
| Balance Sheet | A statement of assets owned, balanced against how they were paid for. |
| Bankers Reserve | The proportion of each deposit which a bank keeps back to cover withdrawals. |
| Barter | The exchange of goods for goods without the use of money. |
| Base Market | A basic market which determines the lower rate for the safest borrowing and which serves as a base rate for the sub-markets. |
| Base Year | The beginning year of an index with which all other years' values are compared, both before and after that year. |
| Black Market | An illegal market. |
| Break-even Point | A point at which all costs are covered (including normal profit) but no super profit is being made. |
| Burden of Tax | Who pays which proportion of a tax levied by the government. |
| Business Cycle | The swings of business activity observable in most market economies. Also known as the trade cylce. |
| Capital | Goods which are used to make other goods or services. |
| Caveat Emptor | 'Let the buyer beware.' |
| Central Bank | A government created institution with the role of controlling banking and purchasing power within the economy. |
| Ceteris Paribus | Everything else is held constant. |
| Chain of Production | The movement of resources from raw materials to finished goods and services. |
| Circular Flow | The flow of money in one flow, and goods and services and factors of production in another flow, from one sector in the economy to another. |
| Civil Liberties | The rights of citizens. |
| Clean Float | A foreign exchange market which operates without any interference. |
| Collusion | The situation where two or more sellers get together with the aim of manipulating the market or acting as a monopoly. |
| Commerce Commission | A government body responsible for assessing the benefits of proposed mergers and takeovers. |
| Commodity Markets - International | The worldwide market for goods and services. |
| Complementary Goods | Goods which are used together. |
| Consume | To be the final user of an output. |
| Consumer Goods | Goods bought for their final use. |
| Consumers Price Index (CPI) | An index which measures the movement in the prices of items which are bought by the average consumer in New Zealand. |
| Consumers' Surplus | The extra satisfaction gained by the consumer but which was not paid for directly as a result of price having to be lowered in order to induce the consumer to buy the last unit. |
| Differentiated Product | A product which is different in a real or imaginary way from a similar product. |
| Law Of Diminishing Marginal Utility | Marginal utility falls as successive units are consumed or used |
| Theory of Diminishing Returns | A theory which observes the varying rate of output in the short run |
| Dirty or Managed Float | A foreign exchange market which appears to be free but is manipulated in some way by government |
| Discretionary Income | The amount of income left after the payment of tax and the purchase of necessities |
| Diseconomies of Scale | When inputs are increased, output is increased but by a lower percentage - inefficient use of resources occurs |
| Disposable Income | Income available to a household to spend, after the removal of income tax |
| Disutility | When consumption results in negative satisfaction |
| Diversification | A process of widening the range of goods and services offered to prospective buyers |
| Dividends | The profit of a company is divided up according to the number of shares owned. The proportion of the profit distributed to any shareholder is called the dividend |
| Division of Labour | Dividing up a task into smaller segments |
| Dumping | Offering surplus product on the world market at a price below that asked in the home country |
| Duopolistic Competition | A market state with only two competitors |
| Duty | A tax on imports |
| Dynamic Stagflation | A situation when both AD and AS move up the graph, the price level rises, but real GDP remains the same or falls |
| Economic Costs | A situation when both AD and AS move up the graph, the price level rises, but real GDP remains the same or falls |
