Lebanese Baccalaureate - Economics & Sociology (SE) key terms

The condition in which available resources are limited relative to the unlimited wants of people, forcing individuals and societies to make choices about what to produce and consume.

The value of the next best alternative given up when a choice is made, measured by what could have been obtained instead with the same resources.

The resources used to produce goods and services, usually grouped as land, labour, capital and entrepreneurship, each earning a corresponding income such as rent, wages, interest or profit.

A curve showing the maximum combinations of two goods an economy can produce when all its resources are fully and efficiently employed.

The principle that, other things being equal, the quantity of a good demanded falls as its price rises and rises as its price falls.

A graph showing the relationship between the price of a good and the quantity consumers are willing and able to buy at each price, other factors held constant.

The principle that, other things being equal, producers offer a larger quantity of a good as its price rises, because higher prices raise potential profit.

The situation in which the quantity demanded of a good equals the quantity supplied at a particular price, so there is neither a shortage nor a surplus.

A measure of how strongly the quantity demanded of a good responds to a change in its price, calculated as the percentage change in quantity divided by the percentage change in price.

A measure of how much the quantity demanded of a good responds to a change in consumers' income, calculated as the percentage change in quantity divided by the percentage change in income.

A legal maximum price set below the equilibrium level, which typically creates a shortage because quantity demanded exceeds quantity supplied at that price.

A legal minimum price set above the equilibrium level, which typically creates a surplus because quantity supplied exceeds quantity demanded at that price.

A market structure with many small buyers and sellers, a homogeneous product, free entry and exit, and full information, so no single firm can influence the price.

A market structure in which a single seller supplies a product with no close substitutes and barriers prevent other firms from entering the market.

A market structure dominated by a small number of large firms whose pricing and output decisions are interdependent, often leading to strategic behaviour such as collusion or price rivalry.

The total market value of all final goods and services produced within a country's borders during a given period, usually one year.

The total income earned by a country's residents, including income earned abroad by nationals, regardless of where the production took place.

Nominal GDP is measured at current prices, while real GDP is measured at constant prices of a base year, so only real GDP reflects changes in actual output rather than price changes.

The process by which an initial change in spending, such as investment or government expenditure, leads to a larger eventual change in national income as the money is respent through the economy.

The fraction of each additional unit of disposable income that households spend on consumption rather than save.

The relationship showing how household consumption spending depends on the level of disposable income, typically rising with income but by less than the full increase.

Spending by firms on capital goods such as machinery, equipment and buildings, and by households on new housing, undertaken to increase future productive capacity.

A sustained rise in the general price level of an economy over time, which reduces the purchasing power of money.

A statistical measure of the average change over time in the prices paid by households for a fixed basket of goods and services, commonly used to estimate inflation.

The actions of a central bank to influence the money supply, interest rates and credit conditions in order to pursue goals such as price stability or economic growth.

The institution responsible for issuing currency, managing a country's reserves and monetary policy, and supervising the banking system, often acting as lender of last resort.

A financial institution that accepts deposits from the public, makes loans and provides payment services, thereby creating credit money through lending.

The total amount of money in circulation in an economy at a given time, usually measured in broad aggregates that include currency and bank deposits.

The quantity of goods and services that a given amount of money can buy, which falls when prices rise and rises when prices fall.

The use of government taxation and public spending to influence the level of economic activity, redistribute income and manage the budget.

The annual statement of a government's planned revenues and expenditures, showing whether it expects a surplus, a balanced position or a deficit.

A tax whose average rate rises as the taxpayer's income increases, so higher earners pay a larger proportion of their income than lower earners.

The accumulated total of money that a government owes to domestic and foreign lenders as a result of past budget deficits.

A systematic record of all economic transactions between a country's residents and the rest of the world during a period, comprising the current, capital and financial accounts.

The difference between the value of a country's exports of goods and services and the value of its imports over a period.

The price at which one currency can be exchanged for another, determined in foreign exchange markets or fixed by authorities.

The process by which countries reduce barriers between their economies, ranging from free trade areas and customs unions to common markets and monetary unions.

The situation of people who are actively seeking work and available to work but cannot find a job at prevailing wage rates.

A condition in which individuals or households lack the income or resources needed to achieve a minimum acceptable standard of living.

The knowledge, skills and health embodied in people, which raise their productivity and are developed through education, training and health care.

The hierarchical arrangement of social groups into layers that differ in wealth, power and status, shaping unequal life chances.

The movement of individuals or groups between positions in a social hierarchy, either upward or downward, over a lifetime or between generations.

The lifelong process through which individuals learn the norms, values and roles of their society, mainly through family, school, peers and media.

An established pattern of norms, roles and practices organised around a basic social need, such as the family, education, religion or work.

A condition in which social norms become weak or unclear, leaving individuals without reliable guidance for behaviour and weakening social cohesion.

The transformation over time of social structures, institutions, cultural patterns and behaviour, driven by factors such as technology, economic development and social movements.

The growing interdependence of economies and societies worldwide through cross-border flows of goods, capital, people, information and culture.

The movement of people from one place to another, either within a country or across borders, for reasons such as work, education, family or conflict.

The historical shift of a population from high birth and death rates to low birth and death rates as a society develops economically and socially.