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

An agreement between two or more countries which eliminates tariffs on trade between the countries, reduces non-tariff barriers to trade, cements rights and protections for investors and corporations, and takes other measures to guarantee a generally liberalized, pro-business economic environment.

A condition in which every willing worker is able to find a paying job within a very short period of time, and hence unemployment is near zero.

Neoclassical economics assumes that production, employment, investment, and income distribution are all determined by a condition of equilibrium (with demand equaling supply) in every single market (including markets for both factors of production and produced goods and services).

A statistical measure of inequality. A Gini score of 0 implies perfect equality (in which every individual receives the same income). A Gini score of 1 implies perfect inequality (in which one individual receives all of the income).

A generalized historical process through which more economic activity takes place across national borders. Forms of globalization include international trade (exports and imports), foreign direct investment, international financial flows, and international migration.

Tangible products which are produced in the economy – including agricultural products, natural resources, manufactured goods, and construction.

The value of all the goods and services produced for money in an economy, evaluated at their market prices. Excludes the value of unpaid work (such as caring reproductive labor performed in the home). GDP is calculated by adding up the value-added at each stage of production.

The basic unit of individual economic behavior. Households offer labor supply to the labor market, earn income (from employment and other sources), make consumer purchases, and care for each other through unpaid labor within the home.

A situation of extremely rapid inflation (reaching 100% per year or more), often resulting from a condition of economic or political breakdown.

Goods or services which are produced in a foreign country and purchased domestically. Imports include money spent on vacations or purchases in foreign countries.