Introduction to Economics GEN1704.2/ECN1101.2 L, Mussurov Altay

One form of fixed capital asset, consisting of machines, computers, transportation equipment, assembly lines, and other equipment. Economists believe that investment in machinery and equipment is very important to productivity growth.

The study of aggregate economic indicators such as GDP growth, employment, unemployment, and inflation. Conventional economics makes a distinction between macroeconomics and microeconomics (the study of individual businesses or industries).

The study of the economic behavior of individual “agents” such as particular companies, workers, or households.

The movement of human beings from one country or region to another. Sometimes migration is motivated by economic factors (such as the search for employment), sometimes by other forces (such as war, natural disaster, or famine).

Monetary policy reflects the use by government and government agencies (especially the central bank) of interest rate adjustments and other levers (such as various banking regulations) to influence the flow of new credit into the economy, and hence the rate of economic growth and job-creation. A “tight” monetary policy tries to reduce the growth of new credit (through higher interest rates); a “loose” monetary policy tries to stimulate more credit- creation and hence growth.

Broadly speaking, money is anything that can be used as a means of payment (for example, to settle a debt). It includes actual currency, bank deposits, credit cards and lines of credit, and various modern electronic means of payment.

A mortgage is a special kind of credit, usually longer-term in duration, used to finance the construction or purchase of property or a long-lasting structure (such as a home or building).

An initial stimulus to spending (in the form of new business, consumer, or government purchases) usually results in a larger final increase in total spending, production, and employment in the economy. This magnifying effect is called the multiplier. The strength of the multiplier depends on many factors, including the type of initial spending, the importance of imports in spending, and the amount of unused capacity that initially existed in the economy.

A financial vehicle which involves pooling investments in the shares of many different joint stock (or publicly traded) companies, in order to reduce the risk and overhead costs associated with investing in corporate shares. An investor buys a unit in the mutual fund, and receives a pro-rated portion of the fund’s total income (including both dividends and capital gains).