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Earn Earned IncomeMoney received for work performed; may include salary, wages, tips, professional fees, commissions, etc.
Easy-Money PolicyMonetary policy designed to stimulate the economy by increasing the level of bank reserves through lowering the discount rate, lowering reserve requirements or buying securities through open market operations.
Economic DevelopmentThe process of improving the quality of human lives through raising living standards. Economic development is broader than economic growth, which is concerned with year-to-year increases in production. Economic development deals with the economic, social and political institutions that govern the way the economy and society function.
Economic EfficiencyA situation in which no one in a society can be made better off without making someone else worse off.
Economic EquityThe application of our concepts of what is "fair" or "unfair" and what is "right" or "wrong" to an economic policy. Ultimately deals with the distribution of income and wealth.
Economic forecasting Economic FreedomThe freedoms of the marketplace--the freedom of consumers to decide how they wish to allocate their spending among various goods and services; the freedom of workers to choose to change jobs, join unions and go on strike; the freedom of individuals to establish businesses and to decide what to produce and when to change their pattern of production; and the freedom of savers to decide when and where to invest their savings.
Economic Functions of GovernmentIn a market economy, government agencies establish and maintain a legal system to regulate both commercial and social behavior, promote competition, respond to market failures by providing public goods and adjusting for externalities, redistribute income and establish macroeconomic stabilization policies. To perform these functions, governments must shift resources from private uses by taxing and/or borrowing.
Economic GrowthAn increase in real output as measured by real GDP or per capita real GDP.
Economic IncentivesFactors that motivate and influence the behavior of individuals and organizations, including firms and government agencies. Prices, profits and losses are important economic incentives in a market economy.
Economic InstitutionsOrganizations such as households and families; formal organizations such as corporations, government agencies, banks, labor unions and cooperatives; a system of law; customary ways of doing things such as the use of money, collective bargaining and the observance of certain holidays; and controlling values and beliefs.
Economic investing Economic LossTotal revenue is less than total costs when total costs include all opportunity costs.
Economic ProfitA firm's total revenue minus all explicit and implicit costs of production, including opportunity costs.
Economic RentPayment for the use of something that is in fixed or perfectly inelastic supply; earnings in excess of the earnings required to keep a resource in its current use; the portion of a resource's earnings that is not necessary to keep the resource in its present use.
Economic SecurityProtection against economic risks, such as unemployment, accidents on the job, business failures or natural disasters, over which people have little or no control.
Economic SystemsThe institutional framework of formal and informal rules that a society uses to determine what to produce, how to produce and how to distribute goods and services.
Economic WantsDesires that can be satisfied by consuming a good or service. Economists do not differentiate between wants and needs.
Economic Way of ThinkingA reasoning process that involves considering costs as well as benefits in making decisions.
EconomicsThe study of how people, firms and societies choose to allocate scarce resources with alternative uses.
Economizing BehaviorConsidering the costs and benefits of various alternatives and choosing the one with the greatest net benefits.
Elasticity Elasticity of Demand Electronic Funds Transfer ActA federal law providing consumer protection for people who use ATMs and debit cards. The law limits users' liability for unauthorized charges made on cards that have been lost or stolen.
Employment Employment RateThe percentage of the total population aged 16 or over that is employed.
EndorsementA signature on the back of a check instructing the bank as to how the check may be cashed. There are three types of endorsement. Blank endorsement: The signature makes the check as good as cash to anybody who holds it. Restrictive endorsement: The signature tags the check for a specific purpose, such as "for deposit only" to a checking or savings account. Special endorsement: The signature allows the holder to transfer the check to another person.
EntrepreneurOne who draws upon his or her skills and initiative to launch a new business venture with the aim of making a profit. Often a risk-taker, inclined to see opportunity when others do not.
EntrepreneurshipA characteristic of people who assume the risk of organizing productive resources to produce goods and services; a resource.
Equal Credit Opportunity ActA federal law that prevents lenders from denying credit on the basis of an applicant's sex, marital status, race, national origin, religion, or age, or because an applicant receives public assistance.
Equilibrium PriceThe price at which the quantity demanded by buyers equals the quantity supplied by sellers; also called the market-clearing price.
Equilibrium QuantityThe quantity demanded and quantity supplied at the equilibrium or market-clearing price.
Equities EquityStock, both common and preferred. Also, the value of mortgaged property after accounting for charges against it or money owed.
Equity financing European Union (EU)An association of European nations created by the Maastricht Treaty signed in 1992. The EU has eliminated quotas and tariffs among its members and created other common economic policies.
Excess ReservesA bank's cash reserves beyond the required reserves, which can be loaned.
ExchangeTrading a good or service for another good or service, or for money.
Exchange RateThe price of one nation's currency in terms of another nation's currency.
Expansion Expansionary Fiscal PolicyAn increase in government spending and/or a decrease in taxes designed to increase aggregate demand in the economy, thus increasing real output and decreasing unemployment.
ExpensesPayments for goods and services.
Experimental EconomicsThe study of people's behavior in the marketplace by scientific testing in the laboratory.
Explicit CostThe monetary payment a firm must make to obtain a resource.
ExportsGoods and services produced in one nation and sold in other nations.
ExternalitiesEconomic side-effects or third-party effects, in which some of the benefits or costs associated with the production or consumption of a product affect someone other than the direct producer or consumer of the product. Can be positive or negative.