The top of a business cycle where an expansion has ended.

A graphical device that shows the relationship between inflation and the unemployment rate.

Exists when the production of a good creates utility (the spillover benefits) for third parties not directly involved in the consumption or production of that good.

measure of the average level of prices in a market basket for a given year, when compared to the prices in a reference (or base) year.

Saving conducted by households and equal to the difference between disposable income and consumption.

Different quantities of goods that an economy can produce with a given amount of scarce resources.

Production of maximum output for a given level of technology and resources. All points on the ppf are productively efficient.

quantity of output that can be produced per worker in a given amount of time.

The proportion of income paid in taxes rises as income rises. An example is the personal income tax.

A constant proportion of income is paid in taxes no matter the level of income. An example is a “flat tax” or the corporate income tax.