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Deadweight loss is lost gains from trade caused by a market inefficiency.---------------------------------------------------------------Subscribe for new vid...
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What is a private good? A private good is any good or service that is excludable and rival.---------------------------------------------------------------Sub...
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What is a common resource? A common resource is any good or service that is nonexcludable and rival. Overuse of a common resource often leads to a tragedy of...
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What is arbitrage? Arbitrage is when you buy low and sell high. Specifically, you buy a low-priced good in one market and resell it in another market where t...
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What do we mean by TANSTAAFL? This is short for a phrase you may have heard before -- “There ain’t no such thing as a free lunch.” In other words, there’s al...
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What is conditional convergence? This term is used to refer to how poor countries tend to grow faster than rich countries, converging to similar levels of in...
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Monetary offset occurs when a central bank responds to expansionary fiscal policy with contractionary monetary policy, and offsets fiscal policy effects.----...
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Opportunity cost refers to the value a person could have received but passed up in pursuit of another option.------------------------------------------------...
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Incentives are rewards and punishments that motivate behavior.---------------------------------------------------------------Subscribe for new videos every T...
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The Fisher effect (named for American economist Irving Fisher) describes how interest rates and expected inflation rates move in tandem.---------------------...
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A normal good describes all goods and services for which demand increases when income increases.-------------------------------------------------------------...
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An inferior good is a good or service where your demand goes down when your income goes up, and vice versa.--------------------------------------------------...
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The leverage ratio is the ratio of debt to equity in a company, bank, house, etc.---------------------------------------------------------------Subscribe for...
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An open market operation is when the Federal Reserve buys and sells Treasury bills to change the amount of money in the economy. This practice is one of many...
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Crowding out is a term used to describe a situation when expansionary fiscal policies decrease, or “crowd out,” private spending.----------------------------...
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Stagflation is an economic condition with persistent high inflation combined with high unemployment and relatively stagnant demand for products.-------------...
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The federal funds rate is the overnight lending interest rate banks charge one another to borrow money.------------------------------------------------------...
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A mutual fund is a portfolio of assets like stocks and bonds that is managed, actively or passively, by professionals who charge a management fee.-----------...
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Ricardian equivalence, named after 19th century British economist David Ricardo, is a scenario in which consumers respond to changes in fiscal policy in ways...
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When an unemployed person wants to have a job, but has given up looking for one, economists describe him or her as a discouraged worker.---------------------...
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A real shock to an economy is an unexpected or unpredictable event and it can have either a positive or negative effect. Examples of real shocks include drou...
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The main idea behind the efficient market hypothesis is that the prices of traded assets already reflect all publicly available information – making it impos...
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The national spending approach, also known as the expenditure approach, takes all the goods and services that go into GDP and splits them into consumption, i...