Deadweight loss is lost gains from trade caused by a market inefficiency.---------------------------------------------------------------Subscribe for new vid...
What is a private good? A private good is any good or service that is excludable and rival.---------------------------------------------------------------Sub...
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...
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...
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...
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...
Monetary offset occurs when a central bank responds to expansionary fiscal policy with contractionary monetary policy, and offsets fiscal policy effects.----...
Opportunity cost refers to the value a person could have received but passed up in pursuit of another option.------------------------------------------------...
Incentives are rewards and punishments that motivate behavior.---------------------------------------------------------------Subscribe for new videos every T...
The Fisher effect (named for American economist Irving Fisher) describes how interest rates and expected inflation rates move in tandem.---------------------...
A normal good describes all goods and services for which demand increases when income increases.-------------------------------------------------------------...
An inferior good is a good or service where your demand goes down when your income goes up, and vice versa.--------------------------------------------------...
The leverage ratio is the ratio of debt to equity in a company, bank, house, etc.---------------------------------------------------------------Subscribe for...
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...
Crowding out is a term used to describe a situation when expansionary fiscal policies decrease, or “crowd out,” private spending.----------------------------...
Stagflation is an economic condition with persistent high inflation combined with high unemployment and relatively stagnant demand for products.-------------...
The federal funds rate is the overnight lending interest rate banks charge one another to borrow money.------------------------------------------------------...
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.-----------...
Ricardian equivalence, named after 19th century British economist David Ricardo, is a scenario in which consumers respond to changes in fiscal policy in ways...
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.---------------------...
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...
The main idea behind the efficient market hypothesis is that the prices of traded assets already reflect all publicly available information – making it impos...
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...