Glossary Terms:

The Big Mac Index

Glossary terms from:
http://www.econedlink.org/e156


Assumptions

Beliefs or statements presupposed to be true.

Capital

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Consumers

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Costs

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Currency

The money in circulation in any country.

Demand

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Depreciation

A reduction in the value of capital goods over time due to their use in production.

Entrepreneur

One who draws upon his or her skills and initiative to launch a new business venture with the aim of making a profit. Often a risk-taker, inclined to see opportunity when others do not.

Exchange

Trading a good or service for another good or service, or for money.

Exchange Rate

The price of one nation's currency in terms of another nation's currency.

Exports

Goods and services produced in one nation and sold in other nations.

Goods

Tangible objects that satisfy economic wants.

Long Run

A period of time long enough for firms to change the quantities of all the resources they use; the exact amount of time varies depending on the industry.

Markets

Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Product

A good or service that can be used to satisfy a want.

Purchases

In a credit arrangement, the total amount spent during the billing cycle.

Purchasing Power

The amount of goods and services that a monetary unit of income can buy.

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Supply

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

Trade

The exchange of goods and services for money or other goods and services.