Microsoft Word Web glossary doc

Surplus, Economic: For the economy as a whole, the surplus equals the amount of production 
over and above what is required for the reproduction of the existing economic system (including 
the necessary consumption required to reproduce the population, and depreciation on the 
existing stock of capital). An economy’s aggregate surplus can be consumed (to allow for a 
standard of consumption higher than mere subsistence, or to finance wasteful projects like wars 
or monument-building), or re-invested to expand future production. 
Surplus, Government: A government surplus exists when a government’s tax revenues exceed 
its total spending (including both interest charges and program spending). 
 
Sustainability: A condition in which the economy does not utilize more resources from the 
natural environment than can be replenished by the normal reproductive capacity of the 
environment, and does not expel more pollution into the environment than can be absorbed 
without ongoing deterioration in environmental quality. Only a sustainable economy can 
function long into the future without encountering natural or environmental limits. 
 
Tariff: A tariff is a tax imposed on the purchase of imports. It is usually imposed in order to 
stimulate more domestic production of the product in question (instead of meeting domestic 
demand through imports). 
 
Taxes: Compulsory government levies collected to pay for public spending. There are many 
different types of taxes (income, corporate, sales, wealth, payroll, and environmental taxes); each 
has a different impact on the economy, and on different groups within the economy. 
 
Technology: Technology is the knowledge which humans collectively possess regarding how to 
produce goods and services in more efficient ways. 
Terms of Trade: The ratio of the average price of a country’s exports, to the average price of its 
imports, is its terms of trade. In theory, an improvement in a country’s terms of trade raises its 
real income (since it can “convert” a given amount of its own output into a larger amount of 
consumable products through trade) – although in practice it depends on how those terms of 
trade gains are distributed.