Annual report. A financial statement from the management of a corporation to its owners, the stockholders.

it informs them about the companys performance during the year, its financial status at the end of the year, and its financial prospects for the coming year. Assets (asets), n. All items of value owned by a person or a business. Balance of trade. The difference between the value of imports and exports. Balance sheet. A statement of a businesss financial position on a particular day. Balanced budget. One which income matches planned spending. Barter, v. A system of a trade in which one type of a good or service is traded directly for another type of good or service. Bond (bond), n. A certificate of debt issued by a corporation which promises to pay a specified amount of money on the date of maturity, plus a certain rate of interest until the bond matures. Selling bond is a method; a corporation uses to borrow money. Budget line. A graph showing various amounts of goods that can be bought with a given sum of money.

Budget surplus. The situation wherein government expenditures exceed its revenues. Business cycle. A pattern of periodic changes in the general level of economic activity consisting of four successive phases: expansion, peak, contraction, and trough. Capital, n. In financial matters, capital refers to money, as a factor of production, capital refers to goods made by people and used specifically to produce other goods and services. Capital Account. In the balance payments, this refers transactions involving Capital Transfers and Acquisition of Nonproduced, Nonfinancial assets. Circular flow diagram. A diagram that summarizes the transactions between the different sectors in an economy. Closed economy. An economy that does not engage in trade with other countries. Collateral, n. A property pledged as security against a loan, which can be sold to recover the money in the event the loan is defaulted. Demand. The amounts of a good or service that consumers are both willing and able to purchase at alternative prices in a given time period, all other things held constant. Depreciation. Represents the consumption of existing capital stock. Durable goods. Goods that last for a long period of time.

Economic growth. A constantly increasing output or income per person per year. Economic profit. The difference between revenues and the opportunity cost of the use of resources in the production of such a commodity. Economics. A branch of the social sciences which deals with the study of how societies allocate scarce resources to produce goods of value and distribute them among different members of the society. Exports. Sales of domestically produced goods and services to other countries. Final good. A good that is not purchased for the purpose of producing other goods or resale. Firm. An entity that purchases and employs resources to produce various goods and services. Fixed cost. The cost of purchasing fixed inputs. Also referred to as sunk cost or overhead cost. Fixed inputs. Resources used at a constant amount in the production of a commodity or service. Free trade. The absence of government interference in the free flow of international trade. Government revenues. The governments collections from tax and non-tax sources.

Gross domestic capital formation. A component of GDP that represents the economys investment spending. Gross domestic product (GDP). The market value of all final goods and services produced within an economy in a given period. Gross national product (GNP). The market value of all final goods and services produced by residents of an economy in a given period. GNP is equal to the sum of GDP and net factor income from the rest of the world. Imports. A countrys spending goods and services that are produced in other countries. Imputing. Refers to the process of approximating the values of certain activities. Incentive. Anything that motivates economic agents to behave in a certain way. Income. A flow variable that measures an amount of value accrued over a specified period of time. Inflation. An increase in the general price level. Isocost. A locus of points, each point representing the different combinations of inputs that produce the same level of output. Isoquant. A locus of points representing the different combinations of inputs that produce the same level of output.

Law of diminishing returns. States that at a certain point, the resulting addition to output decreases when the use of one input is increased holding the use of all other inputs constant. Liquidity. Refers to the ease with which assets can be converted into cash or other assets. Long run. A planning period wherein all inputs are variable. Macroeconomics. The branch of economics that is concerned with the study of aggregate economic behavior such as output, employment, money, and the general price level. Marginal cost. The additional cost incurred for every additional unit of output produced. Marginal product. The additional output produced when the use of one input changes by one unit. Microeconomics. The branch of economics which is concerned with the problems and choices of individual economic units such as consumers, firms, or industries. Monetary base. High-powered which consists of currency that is partly held by the public and partly held by banks as reserves. Money. Anything that is generally acceptable in payment for goods and services. Monopoly. A market condition in which a single firm produces and sells a product that has no good substitute.

Net exports. The difference between exports and imports. Non-durables. Goods and services that are consumed rapidly. Examples include food, beverages and services. Normal good. A good for which demand increases when consumer income increases. Normative economics. The branch of economics that seeks to determine and propose what ought to be. economic propositions and policy prescriptions embody value judgments grounded on the ethical norms held by the society. Oikonomia. An etymological definition of economy, a Greek term which literally means household management. Oligopoly. A market condition in which there are only a few firms producing and selling a product in the market. Open economy. An economy that engages in trade with other countries. Ordinal utility. A concept developed by 20th century economists which argued that it is enough for consumers to be able to rank bundles of commodities according to the order of their preferences to indicate the degree of utility derived from such bundles. Price index. A measure of the cost of purchasing a given bundle of goods in one period relative to the purchasing the same bundle of goods in the base year. Profit. Total revenue minus total cost.

Pure monopoly. A market situation where a single seller exists and sells a product with no good substitute. Pure oligopoly. A market situation where few firms in a market selling the same kind commodity. Quantity theory of money demand. States that the demand for real balances is proportional to the level of real transactions. Real Assets. Assets that are in physical form like land, house, machine and equipment or even people. Real wealth. Real value of assets like stocks, bonds, and real estate that can be sold, if necessary, to provide money for spending. Savings. The excess of disposable income over consumption spending. Supply. The amounts of a good or service that a firm or producer is willing and able to offer for sale at all possible prices in a given time period, all other things held constant. Tariff. A tax on imports. Total cost. Represents the least cost necessary to produce various levels of output. Total product. The total amount of output produced. Total revenue. Total sales of a firm. Derived by multiplying price and output.

Total Utility. The overall satisfaction derived from consuming a good or service. Unemployment. The excess of the labor force over total employment. Unit of account. A unit in which the values of all other goods and services are expressed or quoted. Value Added. The difference between a firms sales and its purchases from other firms. Indicates the contribution of the different factors of production to the value of a good. Variable cost. Refers to the cost of all variable inputs. Variable inputs. Resources whose quantity depends on the level of output being produced. Wealth. A stock variable that refers to the current market value of the total collection of assets presently owned by an individual.

Mariano Marcos State University COLLEGE OF TEACHER EDUCATION Laoag City

Prepared by:

April Jane P. Ramos BEED IV E

Submitted to:

Ms. Imelda Najorda

Glocker, Janet and Wolken, Lawrence. 1982. Invitation to Economics. Scott Foresman & Company. Salvatore, Domnick. 1987. International Economics. 2nd edition. New York: Macmillan Publishing Company.