Economic Terms

The reward for Enterprise. It is the difference between sales revenue and costs. There are many different definitions and it is important to understand the difference between normal profit and abnormal profit.

Are usually direct taxes on assessable income and wealth. The tax will be structured so that a higher proportion of the assessable item is paid in tax as the assessable amount rises e.g. income tax.

Are usually direct taxes on assessable income and wealth. The tax will be structured so that a higher proportion of the assessable item is paid in tax as the assessable amount rises e.g. income tax.

How much of their income consumers are prepared to spend.

How much of their income consumers are prepared to save.

A legal document confirming ownership and the terms of ownership of a property.

When consumers buy a good or service they usually acquire property rights which means that they have exclusive rights to use or benefit from consumption of the good. However, there are situations where external benefits may dilute these property rights.

When a change in one variable is accompanied by a change in another variable and this proportionate change remains the same regardless of the values. 

A simpler alternative to direct and progressive taxes which apply the same single rate of tax on all the income and wealth of all taxpayers.

Is a type of regulation that focuses on ensuring that economic agents such as depositors and taxpayers are protected from unnecessary risk taking in the financial sector. This type of regulation often takes the form of lender of the last resort facilities and deposit protection (which can in turn lead to more moral hazard problems though).