Firm's costs, revenue and objectives
the payments made by firms in the production process, such as salary or wages for workers
Costs / Costs of production
Those markets with an immense degree of competition.
Competitive markets / perfect competition
If the government spends more than it collects from its revenues then ________________ a exists.
budget deficit
A sustained rise in the general price level in an economy (average prices are rising)
inflation
Any commodity that can be used as a medium of exchange for the purchase of goods and services.
money
The costs of production that have to be paid regardless of how much a firm produces or sells.
Fixed costs
The price charged by firms is determined by the market forces of demand and supply rather than by firms setting their prices.
Price takers
This type of tax is paid from the income, wealth, or profit of individuals and firms.
Direct tax
An increase in a country’s real gross domestic product (GDP) over time.
Economic growth
The amounts of money in the economy at a particular point in time, which consists of coins, banknotes, bank deposits and central bank reserves.
Money supply
Costs of production that change when the level of output changes.
Variable costs
Customers and firms have ease of access to information about the product and the prices being charged by competitors.
Perfect knowledge
The percentage tax paid stays the same, irrespective of the taxpayer’s level of income, wealth or profits.
Proportional tax
______________ occurs when people are willing and able to work, and actively seeking employment, but are unable to find work.
Unemployment
The price of borrowing money or the yield from saving money at a financial institution.
interest rates
The aggregate amount of money a firm receives from selling goods and services. (p x q)
Total revenue
The practice of charging different prices to different customers for essentially the same product.
Price discrimination
It is used to stimulate the economy, by increasing government spending and lowering taxes.
Expansionary fiscal policy
A financial record of a country’s transactions with the rest of the world for a given time period, usually one year.
Balance of payments
This monetary policy aims to slow down economic activity done by increasing interest rates.
Contractionary monetary policy
The amount of money a business has left over after paying for its costs.
Profit
There is freedom of entry to, and exit from, the market.
No barriers to entry
The taxpayer should know what, when, where, and how to pay the tax (to limit tax evasion).
Certainty
all payments received from other countries
Credit items
If a government loosens monetary policy in an attempt to expand the economy, what does this involve?
Reducing interest rates and/or increasing the money supply