Real GDP is Gross Domestic Product (GDP) that accounts for inflation or deflation. In other words, it disregards the impact that higher prices have played in economic growth and allows us to compare the quantity of goods produced rather than the value.
A budget surplus is where government brings in more money than it spends. In other words, it receives more in taxes than it spends on defence, welfare, or education.
Ceteris Paribus is a phrase used in economics that makes economic analysis simpler. In essence, Ceteris Paribus means other things equal’. With regards to economics, it assumes that other influencing factors are held constant.
A mixed economy is an economic system that combines elements of a capitalist, market-based system, with a socialist, command economy system. It mixes elements such as private property rights, free trade, and privatization, with socialist elements such as regulation, the welfare state, and re-distribution.
Disposable income is the income we receive after taxation. For example, if we receive $2,000 in wages a month, $500 of that may come out in taxation. After that, we receive $1,500 in ‘disposable income’. In other words, that income can then be used for whatever we like or need.
Deflation can be caused from a number of factors. However, it should be noted that these factors alone may not necessarily cause deflation.
Neoliberalism refers to the resurgence of free market ideas that characterized classical liberalism in the 19th century. It is based on the idea of economic freedom and limited government involvement in economic interactions between individuals.
Capital flight occurs when investors or businesses remove their money from a country. This may be due to economic or political factors such as economic recessions or unstable governments. In reaction to such, investors may fear the loss of their funds and withdraw such an investment where it may be safer.
Absolute poverty is where an individual is unable to meet their immediate needs. In other words, they are unable to obtain basic necessities such as shelter, water, food and warmth.
Gross National Product (GNP) refers to the total value of goods and services where the means of production is owned by domestic residents. It calculates the GDP of the country, plus any income that domestic residents receive on investments abroad, but minus any income foreign residents receive on domestic investments.
