18 terms were found starting with the letter f.

Factor of Production

A resource (for example, capital, labor or land) used to produce a good or service. Same as input into production.

Farming System

Refers to the way that farming is organized and the way that farmers use land. The three broad types of farming systems in the world are settled agriculture, shifting cultivation, and pastoral nomadism.

Fast Track Authority

Procedures designed to facilitate negotiation of trade agreements. In the U.S., fast track authority gives the President the power to negotiate a trade agreement and submit it to Congress for approval or disapproval without amendment.

Fertility Rate

The number of children born alive each year per 1,000 women of childbearing age (usually defined as women between 15 and 49 years old).

Financial Intermediary

Any public or private financial institution that directs loanable funds from savers to borrowers.

Firm Specific Advantage/Firm Specific Asset (FSA)

The special skills and assets that enable a firm to differentiate itself from its rivals. Examples include a firm’s intellectual property such as product development, patents, brands, management techniques, and market knowledge.

Fixed Input

An input whose quantity used is taken as fixed and therefore outside of the control of a firm given the time horizon under consideration.

Floating Exchange Rate

A system where a country’s exchange rate is determined on the market rather than by the government, and where the exchange rate is free to move up and down according to changes in the supply and demand for that country’s currency.

Food Aid

Occurs when a country with an exportable surplus of food, bulk or processed, donates or sells the food to a country in need. If the food is sold, it is usually far below world prices and/or with very subsidized credit provisions.

Food and Agriculture Organization (FAO)

An organization of the United Nations, founded in 1945, whose objectives are to raise levels of nutrition and standards of living, to improve agricultural productivity, to better the living conditions of rural populations, and to conserve natural resources. FAO conducts agricultural research, provides development assistance, collects and disseminates information, and provides policy advice to governments.

Food System

A term that encompasses the whole range of food production and consumption activities. The food system includes farm input supply, farm production, food processing, wholesale and retail distribution, marketing, and consumption.

Foreign Affiliate

A foreign entity in which a parent firm holds a substantial, but not necessarily majority, ownership.

Foreign Aid

Same as development assistance, which consists of international transfers through loans or outright grants, either directly from one country to another or indirectly from one country to another via a multilateral assistance agency like the World Bank.

Foreign Investment

Investments in a country by private corporations or individuals in other countries.

Free on Board (FOB, F.O.B.)

When the selling price of a good does not include transportation costs (freight, insurance). The buyer pays for those costs separately. The risk of loss or damage to the goods in transport is borne by the buyer or the buyer’s insurance company.

Free Rider

An individual, household or firm that benefits from actions paid for by some other individual, household or firm.

Free Trade

When two or more countries agree to drastically diminish, if not eliminate, tariffs and quotas between themselves on some or all goods. However, each country is free to pursue independent policies with respect to the rest of the world.

Futures Exchange

A central marketplace with established rules and regulations where buyers and sellers meet to trade futures and options contracts.

34 terms were found starting with the letter e.

Econometrics

The application of statistical tools and techniques to economic issues and economic data.

Economic Development

The process of improving the quality of human life through increasing per capita income, reducing poverty, and enhancing individual economic opportunities. It is also sometimes defined to include better education, improved health and nutrition, conservation of natural resources, a cleaner environment, and a richer cultural life.

Economic Efficiency

A criterion for evaluating a program or public policy. A program or policy is economically efficient if, among the possible alternative programs or policies, it has the largest excess of social benefits over social costs.

Economic Growth

The process of increasing per capita income.

Economic Model

A diagrammatic, mathematical, written or verbal representation of an entire economy (a general equilibrium model) or part of an economy (a partial equilibrium model). Economic models can range in complexity from a simple supply-demand diagram to a computer-based model containing thousands of equations.

Economic Profit

A firm’s profit over and above the profit that would provide the firm’s owners with a competitive rate of return on the capital they invested in the firm. May be positive, zero, or negative.

Economic Rent

The income received by owners of a resource (e.g., land) over and above the minimum income they would require in order to be willing to make the resource available for use.

Economies of Scale

A situation in which a 1% increase in all inputs into production leads to more than a 1% increase in output.

Economies of Size

A situation in which an increase in output leads to a decrease in the average total cost of production.

Ecosystem

All the organisms in a particular region and the environment in which they live. The elements of an ecosystem interact with each other in some way, and so depend on each other either directly or indirectly.

Effective Exchange Rate

The domestic market price of a good divided by its border price – in other words, the exchange rate actually paid on a given good.

Effective Protection Coefficient/Effective Rate of Protection (EPC, ERP)

The degree of protection given to domestic producers of a good by tariffs and other restrictions on imports. Equal to the percentage amount by which domestic value added per unit of that good exceeds what it would be in the absence of import restrictions.

Elasticity

The percentage change in one economic variable in response to a 1% change in some other economic variable.

Elasticity of Demand

Usually refers to the own-price elasticity of demand, which is the percentage change in the consumption of some good or service in response to a 1% increase in the price of that good or service.

Embargo

A prohibition on imports of a specific good or all goods from a specific country.

Endogenous Growth

Economic growth generated by forces within an economic model as opposed to forces acting from outside on that model. Typically refers to treating accumulation of human capital and technical change as endogenous to an economic model as opposed to exogenous to the model.

Entitlements

As used in the literature on poverty and hunger, refers to the legal right to own, use or sell some good or service. Includes trade-based entitlements (your right to own goods obtained through trade with a willing party), production-based entitlements (your right to own what you produce yourself), own-labor entitlements (your right to the fruits of your own labor), and inheritance and transfer entitlements (your right to goods willingly given to you by others).

Environmental Capital

The stock of natural resources and environmental assets. Includes water, soils, air, flora, fauna, minerals, and other natural resources.

Environmental Kuznets Curve

An “inverted U” relationship between a country’s per capita income and some measure of environmental degradation. Environmental degradation first worsens during the course of economic growth and then later improves.

Environment-Constant Tradeoff Curve

In the case of production, a curve showing the possible alternative combinations of two goods (for example, agricultural and nonagricultural goods) that an economy can produce while holding constant the total economic costs of environmental externalities from production in the two sectors. Defined similarly in the case of consumption.

Equality Under the Law

A legal environment in which a person’s legal rights and responsibilities as a citizen do not depend on the economic status, ethnicity, gender, political status, race, or social status of that person, that person’s relatives, or that person’s friends and associates.

Equilibrium Exchange Rate

The exchange rate at which a country’s supply of hard currency earned through exports, foreign investment and foreign aid is equal to its demand for hard currency needed in order to pay for imports.

European Community (EC)

An economic federation of European countries that was superseded in 1993 by the European Union.

European Free Trade Association (EFTA)

An international organization with four member countries: Iceland, Liechtenstein, Norway, and Switzerland. The purpose of EFTA is to monitor and manage relationships among the EFTA states.

European Union (EU)

An economic federation of 15 European countries created in 1993 in which there is free movement of goods, services, capital and labor across member countries. The EU has a variety of programs funded by member countries. It also coordinates economic, social and environmental policies across member countries.

Eutrophication

The fertilization of surface waters by nutrients that were previously scarce. Eutrophication through nutrient and sediment inflow is a natural aging process by which warm shallow lakes evolve to dry land. In many cases human activities are greatly accelerating the process. The most visible consequence of eutrophication is proliferation of algae.

Exchange Rate

The rate at which a bank or other financial intermediary will exchange one country’s currency for another. Often expressed in units of the domestic currency per U.S. dollar – for example, 10 Mexican pesos per U.S. dollar.

Exhaustible Resource

A resource whose total stock is fixed or whose rate of regeneration is so small relative to consumption that it can for all practical purposes be regarded as fixed.

Existence Value

An economic value placed on an environmental or natural resource above and beyond any value that might be derived from the actual use of the resource or from the value of preserving the option of future use.

Export Credit Guarantee

A government sponsored credit guarantee for commercial financing of exports, often to protect a country’s exporters against potential loss due to non-payment by foreign buyers.

Export Subsidy

A government payment made to an exporter for the purpose of facilitating exports. In Europe, this is often called an export restitution.

External Debt

The total private and public debt owed by a country to individuals, households, firms, and governments in other countries.

Externality

Any benefit or cost imposed by an individual, household or firm on another individual, household or firm for which no compensation is paid or received.

Extreme Poverty

A situation in which a person or household lacks the resources to consume a certain minimum amount of food judged to be necessary for adequate nutrition, even in the case when all resources are devoted to food.

19 terms were found starting with the letter d.

De Minimis Rule

A rule in the Uruguay Round Agreement on Agriculture under which a country’s aggregate measure of support (AMS) includes a specific commodity only if support for that commodity exceeds 5% of its domestic value of production. General support (not tied to specific commodities) is included in the AMS only if it exceeds 5% of the value of total domestic agricultural output.

Deadweight Loss

The monetary value of the loss in economic efficiency due to a government policy (for example, a tax, subsidy, quota, price floor, or price ceiling) that causes market prices, supply or demand to differ from their free market equilibrium values.

Death Rate

The number of deaths in a given year per 1,000 population.

Debt for Nature Swap

An agreement between an organization, typically a nongovernmental organization (NGO), and a developing country that has forest resources. The organization pays off a portion of the country’s external debt in exchange for the country’s promise to preserve some forested region.

Debt-Service Ratio

The payment of capital plus interest charges necessary to pay off a loan over an agreed-upon period of time.

Decreasing Returns to Scale

A situation in which a 1% increase in all inputs into production leads to less than a 1% increase in output.

Decreasing Returns to Size

A situation in which an increase in output leads to an increase in the average total cost of production.

Deficiency Payment

An output subsidy in which the subsidy per unit of output of a commodity is the difference between a government-set price and the market price. Under a deficiency payment program, producers always receive the government-set price regardless of the market price.

Demand Curve

A diagrammatic representation of the relationship between the demand for a good and its price, usually with price on the vertical axis and quantity demanded on the horizontal axis.

Demographic Transition

The historical process of first moving from high birth rates and high death rates to high birth rates and low death rates, and then finally to low birth rates and low death rates.

Dependency Burden

The proportion of the total population aged 0 to 15 and 65+, age groups that typically contribute relatively little to the production of goods and services.

Depreciation

The loss of capital that occurs when machinery, equipment, and other capital goods are used up, wear out, break down, or are rendered obsolete by the introduction of new and improved capital goods.

Desertification

The progressive destruction or degradation of existing vegetative cover that leads to the formation of a desert. This can occur due to overgrazing, deforestation, drought, or the burning of extensive areas.

Developed Country

Another name for a high-income country, that is, a country with a relatively high level of per capita income.

Developing Country

Another name for a low-income country or middle-income country, that is, a country with a relatively low or middle level of per capita income.

Development Assistance

International transfers through loans or outright grants, either directly from one country to another or indirectly from one country to another via a multilateral assistance agency like the World Bank.

Dryland Farming

The production of crops in arid and semiarid regions without using irrigation.

Dumping

Selling a good in another country at a price below which the same good is sold in the home market or selling a good below the cost of production and distribution.

Duty

A tax imposed on imports by a country.

42 terms were found starting with the letter c.

Cairns Group

A group of countries formed in 1986 in Cairns, Australia, that seeks the removal of trade barriers and substantial reductions in subsidies affecting agricultural trade. The Cairns Group was a strong coalition in the Uruguay Round of multilateral trade negotiations.

Capital

Tangible investment goods such as plant and equipment, machinery, and buildings. Often referred to as physical capital in order to distinguish it from human capital.

Capital Account

The part of a country’s balance of payments ledger showing inflows of private investment from other countries, outflows of private investment to other countries, and inflows and outflows of government grants and loans. See also current account.

Capital Accumulation

Increasing a country’s capital stock through investment above and beyond capital lost due to depreciation.

Capital Flight

When worried private investors liquidate whatever capital they can and move it out of a country into safer havens where there is less risk of loss.

Capital Market

The market for buying and selling long-term loanable funds such as bonds and mortgages. The market for short-term funds is typically referred to as the money market.

Capital Stock

The total amount of tangible investment goods such as plant and equipment, machinery, and buildings.

Capital-Augmenting Technical Change

Technical change that increases output by raising the productivity of capital. For example, more powerful or more reliable farm machinery could be interpreted as capital-augmenting technical change.

Capitalism

An economic system in which most of the economy’s resources are privately owned and managed.

Carbon Sink

A forest or other natural area that absorbs carbon dioxide.

Carbon Tax

A tax on products that emit greenhouse gases, levied in proportion to their content of carbon and other greenhouse gases.

Cartel

A group of firms or countries that explicitly agree to set prices and/or limit output in order to raise profits. OPEC (the Organization of Petroleum Exporting Countries) is an example of a cartel.

Cash Crop

A crop produced entirely or almost entirely for sale on the market rather than for home consumption. See also subsistence crop.

Ceiling Binding

In cases where an existing tariff was not already bound, developing countries were allowed to establish ceiling bindings. These ceiling bindings could result in tariffs that were higher than the existing applied rate. The ceiling bindings took effect on the first day of the implementation of the Agreement on Agriculture.

CIF (Cost + Insurance + Freight)

When the selling price of a good includes transportation costs (freight, insurance), so that the buyer does not have to pay for those costs separately. The risk of loss or damage to the goods in transport is borne by the seller or the seller’s insurance company.

Climate Change

A long-term change in atmospheric and/or ocean conditions due to natural or human activity. Climate change is sometimes used synonymously with the term global warming, but climate change is a broader term because it includes natural changes in climate.

Closed Economy

An economy in which there are no trade or investment activities with the rest of the world.

Club Good

A good that is excludable but nonrival. A good is excludable if it is possible to prevent someone from consuming that good once it has been made available to the public. A good is nonrival if one person’s consumption of that good does not reduce the quantity available for consumption by someone else.

Coase Theorem

States that, in the presence of an externality, a Pareto-optimal outcome for dealing with the externality will result through the market – no government action required – as long as transaction costs are negligible. Also states that, under these conditions, the initial assignment of property rights will have no impact on the Pareto-optimal outcome.

Codex Alimentarius Commission (CODEX)

A world body that develops food standards, guidelines, and codes of practice. The main purposes of CODEX are to protect the health of consumers, ensure fair trade practices in food trade, and promote coordination in food standards among countries.

Commodity

An article of trade or commerce. Often used to denote goods that are relatively homogenous (e.g., corn).

Common Market

Involves free trade not only in goods and services between member countries, but also unrestricted movement of labor and capital. Usually implies common policies and a progressive reduction of non-tariff barriers. (i.e., rules, regulations, standards, and specifications become harmonized between member countries).

Common Property Resource

A resource where the rights of use are communally shared and ownership is not private but communal.

Comparative Advantage

The ability of one country to produce a some given quantity of a good or service a lower opportunity cost than another country, taking into account the fact that resources used in the production of one good or service are no longer available for use in the production of other goods and services.

Constant Returns to Scale

A situation in which a 1% increase in all inputs into production leads to exactly a 1% increase in output.

Constant Returns to Size

A situation in which an increase in output does not lead to any change in the average total cost of production.

Consumer Support (Subsidy) Estimate

Indicator of the annual monetary value of gross transfers to consumers arising from government policies directed toward producers in a particular sector (e.g., agriculture). Is negative if policies transfer income away from consumers toward producers.

Consumer Surplus

A measure of the benefits to consumers from the consumption of a good or service. Defined as the area below the demand curve up to the total quantity consumed, minus total expenditures on the good or service.

Contagion

Occurs when a financial crisis in one country spills over into other countries.

Cost Minimization

Using inputs into production so as to produce any given level of output at the lowest possible total cost. Unlike the profit maximization criterion, the cost minimization criterion does not ask what level of output a firm should choose, only how it should choose inputs given the level of output it has chosen.

Cost-Benefit Analysis

An economic technique in which anticipated private and social costs of a proposed investment, public policy or other activity are weighted against anticipated private and social benefits from the proposed activity.

Cost-Effectiveness

A criterion for evaluating a program or public policy. A program or policy is cost-effective if it attains its objectives at the lowest possible social cost. Unlike economic efficiency, the cost-effectiveness criterion does not ask if the objectives are socially desirable.

Counterfactual

In economics, a “what if?” analysis. Used to think about how an economy might be different if one or more underlying conditions or public policies were different.

Countervailing Duty

An additional levy imposed on imported goods to offset subsidies provided to producers or exporters by the government of the exporting country, permitted under Article VI of the GATT.

Country Schedules

The official schedules of subsidy commitments and tariff bindings as agreed to under GATT for member countries.

Cournot Model

An oligopoly model in which firms assume that their competitors’ outputs are fixed, and in which they simultaneously decide how much to produce.

Crawling Peg

An official exchange rate system under which the government devalues the currency by a small amount on a weekly, daily or even more frequent basis.

Cross-Price Elasticity of Demand

The percentage change in the consumption of some good or service in response to a 1% increase in the price of some other good or service.

Crowding Out

When private economic activity is displaced by public economic activity (e.g., when government borrowing reduces investment funds available to private sector borrowers).

Crude Birth Rate

The number of children born alive in a given year per 1,000 population.

Current Account

The part of a country’s balance of payments ledger showing exports of goods and services to other countries, and imports of goods and services from other countries.

Customs Union

A union of countries in which free trade exists between member nations and external tariffs may be erected against all outside countries. The tariffs may be different for different goods and applied to some countries and not others, but the trade policy with respect to all external countries is consistent throughout member countries.