Economia

GLOSSARY absolute advantage—the comparison among producers of a good according to their productivity aggregate-demand curve—a curve that shows the quantity of goods and services that households, firms, and the government want to buy at each price level aggregate-supply curve—a curve that shows the quantity of goods and services that firms choose to produce and sell at each price level appreciation—an increase in the value of a currency as measured by the amount of foreign currency it can buy automatic stabilizers—changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action balanced trade—a situation in which exports equal imports bond—a certificate of indebtedness budget deficit—a shortfall of tax revenue from government spending budget surplus—an excess of government receipts over government spending capital flight—a large and sudden reduction in the demand for assets located in a country catch-up effect—the property whereby countries that start off poor tend to grow more rapidly than countries that start off rich central bank—an institution designed to oversee the banking system and regulate the quantity of money in the economy ceteris paribus—a Latin phrase, translated as “other things being equal,” used as a reminder that all variables other than the ones being studied are assumed to be constant circular-flow diagram—a visual model of the economy that shows how dollars flow through markets among households and firms classical dichotomy—the theoretical separation of nominal and real variables closed economy—an economy that does not interact with other economies in the world collective bargaining—the process by which unions and firms agree on the terms of employment commodity money—money that takes the form of a commodity with intrinsic value comparative advantage—the comparison among producers of a good according to their opportunity cost competitive market—a market