Economic Concepts and Definitions

GDP

GDP is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.

Industrial Revolution

Transition to new manufacturing processes in Europe and the US, in the period from about 1760 to sometime between 1820 and 1840.

Labor Force

Number of people who are employed plus the unemployed who are looking for work.

Labor Force Participation Rate

Labor force participation rate refers to the number of people available for work as a percentage of the total population.

Cyclical Unemployment

Cyclical unemployment is a factor of overall unemployment that relates to the regular ups and downs, or cyclical trends in growth and production, that occur within the business cycle.

Inflation

Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.

Marginal Tax Rates

A marginal tax rate is the tax rate incurred on each additional dollar of income. This method of taxation aims to fairly tax individuals based upon their earnings, with low-income earners being taxed at a lower rate than higher income earners.

Barter

Is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.

Import Quotas

Is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.

Free Trade Agreement

A free trade agreement (FTA) is a treaty between two or more countries to facilitate trade and eliminate trade barriers. It aims at eliminating tariffs completely from day one or over a certain number of years.

The formula to calculate the components of GDP is Y = C + I + G + NX. That stands for: GDP = Consumption + Investment + Government + Net Exports, which are imports minus exports. The formula to calculate the components of GDP is Y = C + I + G + NX. That stands for: GDP = Consumption + Investment + Government + Net Exports, which are imports minus exports. Y = C + I + G + (X – M). X: Exportaciones M: Importacilnes

Regresive tax: Tax more low Incomes Proportional tax: Everyone pays the same