Term Definition
GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year.

Goods-Dominant Logic

One way of analyzing commercial activity. Humans took the land and other natural resources and applied labor or human capital to transform natural resources into manufactured products. 

Gross Domestic Product (GDP)

A broad measure of economic activity that is commonly used to gauge the economic performance of a whole country or region, and to make international comparisons. 

Gross National Product (GNP)

A similar economic indicator as GDP. GNP  sums  all  production  owned  by  citizens  of  a  country,  whether  they  are  inside  or  outside  of  that country’s  borders.

Gross Profit

Is equal to subtracting the cost of the goods sold (CGS), from the revenue of the firm. 

Heterogeneity

The quality or state of consisting of dissimilar or diverse elements. 

Homogeneity

The quality or state of being of a similar kind or of having a uniform structure or composition throughout.

Import

purchases of good or services by a domestic economy from a foreign economy.

Inalienable Right

A kind of property right which can never be bought or sold. 

Incentive

A thing that motivates or encourages one to do something.

Inferior Good

A good whose demand decreases when consumer income rises, unlike normal goods, for which the opposite is observed.

Inflation

A sustained increase in the average prices of all goods and services. 

Institutions

An  institution  is  a  framework  for  interacting.  Norms,  laws,  and customs  evolve  to help people  know  what  to expect from  each other.

Intangible

Unable to be touched or grasped; not having physical presence.

Integrity

The quality of being honest and having strong moral principles; moral uprightness.

Interest

a stake, share, or involvement in an undertaking, especially a financial one.

Labor

In economics, labor is the general body of wage earners. In a more special and technical sense, however, labour means any valuable service rendered by a human agent in the production of wealth, other than accumulating and providing capital or assuming the risks that are a normal part of business undertakings. In classical economics, the three factors of production are land, labor, and capital.

Labor Force

The number of people eligible for work. This includes both the number of people who are employed, and the people who are looking for work. 

Land

In economics, land is the resource that encompasses the natural resources used in production. In classical economics, the three factors of production are land, labor, and capital.

Law

The system of rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition of penalties.

Liability

What the firm owes to others. Debt is also another term used for liability. The entities that are owed could be individuals, suppliers, banks, bondholders, the government, or any entity that is owed financial resources. 

Liquidity

Refers to how quickly an asset can be converted to cash. The most liquid assets are called current assets, which means that they can be converted into cash or cash equivalents within a year. 

Long Run

A conceptual time period which will vary depending on the business or industry in question. In the long run, there are no fixed factors of production. In other words, every factor is variable. For example, there are no binding contracts, no set suppliers, no production capacities of a specific factory. There are no constraints on changing the output level by changing the capital stock, workforce or even entering or exiting an industry. 

Macroeconomics

A branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole

Marginal Value

The value gained from either consuming or producing one additional unit of a good or service.

Market Power

The ability of a firm (or group of firms) to influence the price of a good, either by setting the quantity traded or by setting the price. 

Mercantilism

The economic theory that trade generates wealth and is stimulated by the accumulation of profitable balances, which a government should encourage by means of protectionism. Mercantilism is a national economic policy that is designed to maximize the exports, and minimize the imports, of a nation.

Monetary Policy

Consists of management of money supply and interest rates, aimed at achieving macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.

Money

A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition.

Monopsony

a market condition in which there is only one buyer. A single buyer dominates a monopsonized market while an individual seller controls a monopolized market.

Mutual Gain

In trade, mutual gain refers to the knowledge that each individual will be better off after an exchange.

Negative Externality

Also known as an external cost, a negative externality is the cost of a transaction paid by third parties who were not consulted, and whose interests weren't accounted for. 

Nepotism

The practice of favoring relatives or friends, especially by giving them jobs.

Net Profit

Is  equal  to sales  or  revenue,  minus  cost  of  producing goods  or  providing  services  (CGS),  and  minus general  selling and  administrative  (SGA)  costs.

Nominal

In economics, "nominal" means an unadjusted rate. It can also mean a change in value.