Course glossary

During lectures you will learn new words. Using this link you are welcome to add them to our "course glossary", so that other students will be able to see them and learn. Let's make our own useful glossary and help each other to learn new words! By the way, there are already some worlds which should be familiar for you till the end of the course, try to cover them when you mill have free time.

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M

M1

The most liquid of money definitions and the basis for all other more broadly defined measures of money.

Macroeconomic equilibrium

Occurs when the Q of real output D is equal to the Q of real output supplied. Graphically this is at the intersection of AD and AS.

Macroeconomic long run

A period of time long enough for input prices to have fully adjusted to market forces. In this period, all product and input markets are in a state of equilibrium and the economy is operating at fe. Once all markets in the economy have adjusted and there exists this long-run equilibrium, the as curve is vertical at GDPR.

Macroeconomic short run

A period of time during which the prices of goods and services are changing their respective markets, but the input prices have not yet adjusted to those changes in the product markets. During the sr, the as curve has three stages – horizontal, upward sloping and vertical.

Marginal

The next unit or increment of an action.

Marginal analysis

Making decisions based up weighing the marginal benefits and costs of that action.

Marginal benefit (MB)

additional benefit received from the consumption of the next unit of a good or service.

Marginal cost (MC)

The additional cost incurred from the consumption of the next unit of a good or service.

Marginal productivity theory

The philosophy that a citizen should receive a share of economic resources proportional to the marginal revenue product of his or her own productivity.

Marginal propensity to consume (MPC)

The change in consumption caused by a change in disposable income, or the slope of the consumption function. MPC = ▲c/▲di.