Myanmar Matriculation Economics flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Opportunity cost
- The value of the next best alternative forgone when a choice is made; measured in real units of the alternative good rather than money.
- Production possibility curve
- A curve showing the maximum combinations of two goods an economy can produce with given resources and technology; points inside are inefficient and outside are unattainable.
- Ceteris paribus
- A Latin phrase meaning all other things being equal; used in economics to isolate the effect of one variable while holding others constant.
- Law of demand
- Ceteris paribus, quantity demanded of a good rises as its price falls and falls as its price rises, giving a downward-sloping demand curve.
- Equilibrium price
- The price at which quantity demanded equals quantity supplied; at this price there is neither shortage nor surplus and the market clears.
- Price elasticity of demand
- The percentage change in quantity demanded divided by the percentage change in price; values above one are elastic and below one inelastic.
- Cross elasticity of demand
- The percentage change in quantity demanded of one good divided by the percentage change in the price of another; positive for substitutes and negative for complements.
- Law of diminishing marginal utility
- As a consumer consumes more units of a good in a given period, the extra satisfaction from each additional unit eventually falls.
- Marginal cost
- The addition to total cost from producing one more unit; it cuts average cost at the minimum point of the average cost curve.
- Profit maximisation rule
- A firm maximises profit by producing the output where marginal revenue equals marginal cost, provided price covers average variable cost.
- Perfect competition
- A market with many buyers and sellers, a homogeneous product and free entry and exit, so each firm is a price taker facing a horizontal demand curve.
- GDP
- Gross domestic product: the total market value of all final goods and services produced within a country's borders during a given period, usually a year.
- Multiplier
- The ratio of a change in equilibrium national income to the change in autonomous spending that caused it; equal to one divided by one minus the marginal propensity to consume.
- Money supply M1
- The narrow measure of money consisting of currency held by the public plus demand deposits at commercial banks, which are usable for transactions.
- Monetary policy
- Central bank actions to control money supply and credit conditions, mainly through interest rates, reserve requirements and open market operations, to influence inflation and output.
- Progressive tax
- A tax whose average rate rises as the taxpayer's income rises, so higher-income earners pay a larger proportion of their income.
- Fiscal deficit
- The excess of government expenditure over government revenue in a given period, financed by borrowing, foreign aid or money creation.
- Comparative advantage
- The ability to produce a good at a lower opportunity cost than another country, which is the basis for mutually beneficial specialisation and trade.
- Balance of payments
- A systematic record of all economic transactions between residents of a country and the rest of the world in a period, comprising current, capital and financial accounts.
- Currency depreciation
- A fall in the value of a currency under a floating exchange rate, making exports cheaper and imports dearer abroad.
- Human Development Index
- A composite index combining life expectancy, education and gross national income per capita, used to measure development beyond income alone.
- Gini coefficient
- A measure of income inequality ranging from zero for perfect equality to one for perfect inequality, derived from the Lorenz curve.
- Economic development
- Improvement in living standards and welfare including growth in real income plus better health, education, reduced poverty and structural change.
- Rostow stages of growth
- A model describing development as passing through traditional society, preconditions for take-off, take-off, drive to maturity and high mass consumption.
- Structural change
- A long-term shift in an economy's composition, typically from agriculture toward industry and services, accompanied by urbanisation and rising productivity.
- Foreign direct investment
- Investment by a foreign firm that acquires lasting ownership or control of productive assets in the host country, bringing capital, technology and jobs.
- Indicative planning
- A planning approach in which government sets targets and uses incentives and policy rather than directives to guide private sector decisions.
- Myanmar Sustainable Development Plan
- Myanmar's 2018 to 2030 framework organised around peace, prosperity, people, planet and partnership, linking national policy to the Sustainable Development Goals.
- Harrod-Domar model
- A growth model in which the growth rate equals the savings rate divided by the capital-output ratio, implying higher saving raises growth.
- Lewis two-sector model
- A development model in which surplus labour moves from a low-productivity rural sector to a modern industrial sector, raising output and wages.
- Import substitution
- A trade strategy that protects domestic industry with tariffs and quotas to replace imported goods with locally produced ones, often at the cost of efficiency.
- Terms of trade
- The ratio of a country's export price index to its import price index multiplied by one hundred; a rise means exports buy more imports.