Glossary
1
IB Economics
2
IB Economics Glossary of terms
This resource is designed to help ensure that you can make accurate use of specialist economics terms in your work.
It is up to you how much use you make of it. Some of you, I feel would benefit from it hugely, others will find it more use a revision
tool rather than one that will help them use terminology more accurately. If I find that you are not making sense or that you are
using words inaccurately then I may insist that you start to complete this and use it.
It is useful for both native and non-native speaker alike. In economics many words have a specific meaning that is not the same as
the one they have in every day English.
The booklet is laid out in the same order as the course:
 Introduction to economic ideas
 Microeconomics
 Macroeconomics
 International Trade
 Development Economics
The words are in English first of all, then YOU need to write them in your ‘home language’.
It is up to you to ensure that you are using the right word here. Remember words often have different meanings, or that words
that sound the same may be spelt differently and so have different meanings. CARE!
Then finally you must put in you own definition. Do not use ‘cut and Paste’! The very act of writing the definition and thinking
about what you are writing will go a large way to helping you remember it. Again, take care that you are using the word in the right
way. For example, when we talk about a compliment do we mean “Your hair looks nice” Or “Two goods in joint demand”. Or in ICT,
‘port’. In a dictionary, it says this is a shelter near land for ships and boats. Is this likely to be it’s meaning in ICT? THINK! Another
reason why ‘ctrl C, ctrl V’ is not a good idea.
Don’t complete it all in one go, but do it steadily as we go through each unit.
3
Introduction to Economic Principles
4
Introduction to Economic Ideas
English
Social Science
Home Language
Definition
Development
Sustainable Development
Positive Statements
Normative Statements
Ceteris Paribus
Scarcity
Choice
Factors of Production
Land
Labour
5
Capital
Entrepreneurship
Rent
Wages
Profit
Interest
Utility
Marginal
Opportunity cost
Production Possibility frontier
(PPF)
Diminishing returns
6
Economic growth
Economic Development
Pareto efficient
Rationing
Incentive
Public Sector
Private Sector
Merit goods
Public Goods
The Economic question
Price mechanism
7
Command Economy
Mixed economy
Free Market economy
Transition
8
9
Microeconomics
2.1 Markets
English
Home Language
Definition
Markets
Demand
Latent Demand
Derived Demand
Substitutes
Compliments
Income
Expectations
Shifts
Normal Goods
10
Inferior Goods
Giffen Goods
Veblin Goods
Supply
Taxes
Subsidy
Equilibrium
Price
Quantity
Price Floor
Price Ceiling
11
Commodity agreements
Black Markets
Buffer stock systems
12
2.2 Elasticities
English
Price Elasticity of Demand
(PED
Home Language
Definition
Elastic Demand
Inelastic Demand
Unitary elasticity
Perfectly Elastic
Perfectly inelastic
Cross Elasticity of demand
Income Elasticity of Demand
Price Elasticity of Supply
Indirect Taxation
Direct taxation
13
Ad Velorem taxes
Flat rate taxes
14
2.3 Theory of the Firm
English
Home Language
Definition
Fixed Costs
Variable Costs
Average cost
Depreciation
Short run
Long run
Total Costs
Marginal Costs
Economic cost
Normal Profit
Abnormal Profit
15
Total Product
Marginal Product
Division of Labour
Economies of Scale
External Economies of scale
Diseconomies of scale
Revenue
Profit Maximisation
Perfect Competition
Homogenous
Barriers to entry
16
Shut down price
Productive efficiency
Allocative efficiency
Consumer Surplus
Producer surplus
Monopoly
Natural Monopoly
Contestable markets
Monopolistic Competition
Differentiation
Oligopoly
17
Merger
Collusion
Interdependence
Cartel
Contestable Markets
Price Discrimination
18
2.4 Market Failure
English
Market Failure
Home Language
Definition
Externalities
Legislation
Private cost
Public cost
Social cost
Property Rights
19
20
Macroeconomics
3.1
Measuring National Income
English
Consumption
Home Language
Definition
Investment
Government
Exports
Imports
Transfer Payments
Gross Domestic Product
Net Domestic Product
Gross National Product
Nominal
21
Real
Per capita
22
3.3MacroEconomic models
3.4 Demand and Supply side policies
English
Aggregate Demand
Home Language
Definition
Aggregate supply
Full Employment
Inflationary Gap
Business Cycle
Recession
Expectations
Monetary Policy
Fiscal Policy
Interest rates
23
Supply-side
Demand-side
Time Lags
Multiplier
Accelerator
Marginal Propensity to…
24
3.5
Unemployment and inflation
English
Unemployment
Home Language
Definition
Full Employment
Underemployment
Structural Unemployment
Frictional Unemployment
Seasonal Unemployment
Demand
Unemployment
Deficient
Inflation
Phillips Curve
Expectations Augmented…
25
Natural
Rate
Unemployment
of
NAIRU
26
3.6
Distribution of Income
English
Home Language
Definition
Equity
Progressive Tax
Regressive Tax
Proportional Tax
Laffer Curve
Lorenz Curve
Gini Coefficient
Kuznet’s Curve
27
28
International Economics
English
Home Language
Definition
Trade
Factor endowment
Absolute Advantage
Tariffs
Free Trade
Quotas
Protectionism
Quotas
Voluntary Export Restraints
(VERS)
Infant Industry
29
Diversification
Balance of Payments
Dumping
Globalisation
Free Trade
Free Trade Area
Trade Creation
Trade Diversification
WTO
Current Account
Capital Account
Invisibles
30
Fixed Exchange Rates
Floating Exchange Rate
Speculation
Purchasing Power Parity
Marshall-Lerner Condition
J-Curve
Terms of Trade
31
32
Development Economics
English
Developed Countries
Home Language
Definition
Newly
Industrialised
Countries (NICS)
Human Capital
Physical Capital
Infrastructure
Sustainability
Virtuous
Development
Cycle
of
Poverty Cycle
Corruption
Informal Markets
33
Primary Products
Indebtedness
Non-Coverable Currencies
Capital Flight
Soft Loans
Tied Aid
Export Led Growth
Import Substitution
Micro-Credit
Fair Trade
Foreign
(FDI)
Direct
Investment
34
The IMF
MNC’s (TNC’s)
35