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ECONOMICS FOR
EVERYONE:
ON-LINE GLOSSARY OF
TERMS & CONCEPTS
By Jim Stanford
© Canadian
Centre for Policy Alternatives, 2008
Non-commercial use and reproduction, with appropriate citation, is authorized.
This glossary contains non-technical descriptions of all
the terms in Economics for Everyone
highlighted in
SMALL CAPITALS
. Italicized terms within the definitions are
themselves defined
elsewhere in the glossary, for cross-reference.
Absolute Poverty: Poverty defined with respect to an absolute material standard of living.
Someone is absolutely poor if their income does not allow them to consume enough to purchase
a minimum bundle of consumer goods and services (including shelter, food, and clothing). An
alternative
approach is to measure relative poverty.
Accelerator, Investment: Investment spending stimulates economic growth, which in turn
stimulates further investment spending (as businesses enjoy stronger demand for their products).
This positive feedback loop (investment causes growth which causes more investment)
is called
the accelerator.
Allocative Efficiency: A neoclassical concept referring to the allocation of productive resources
(capital, labour, etc.) in a manner which best maximizes the well-being (or “utility”) of
individuals.
Automatic Stabilizers: Government fiscal policies which have the effect of automatically
moderating the cyclical ups and downs of capitalism. Examples include income taxes (which
collect more or less taxes depending on the state of the economy)
and unemployment insurance
benefits (which automatically replace lost income for people who lose their jobs).
