Economic Efficiency
Economic efficiency refers to the optimal allocation of resources to maximize overall welfare or output.
Macroeconomics
The branch of economics that looks at the economy as a whole. It looks at factors which affect the wider economy rather than individuals. Examples include inflation, trade, unemployment, and economic growth.
Nominal Interest Rate
The nominal interest rate is the stated interest rate without accounting for inflation, representing the rate at which money grows over time.
Real Interest Rate
Real interest rates are the nominal interest rates adjusted for inflation, representing the true return on an investment after accounting for changes in purchasing power.
Human Development Index
The Human Development Index (HDI) is a composite measure that assesses a country’s overall development based on indicators such as life expectancy, education, and income.
Economic Growth
Economic growth is the long-term increase in an economy’s capacity to produce goods and services.
Crowding Out Effect
The crowding out effect refers to the reduction in private sector investment caused by increased government borrowing and spending, leading to higher interest rates and potential limitations on economic growth.
Fractional Reserve Banking
Fractional reserve banking is a system in which banks are only required to hold a fraction of customer deposits as reserves, allowing them to lend out the majority of the funds.
Quotas
A quota is a government-imposed restriction on the quantity of a particular good that can be imported or exported.
Net Exports
Net exports represent the difference between a country’s total exports and imports of goods and services, reflecting its trade surplus or deficit and influencing economic growth and currency exchange rates.
Expansionary Monetary Policy
Expansionary monetary policy is an economic approach where central banks increase the money supply, lower interest rates, and employ other measures to stimulate economic growth and increase aggregate demand.