Glossary Category: Economics - Page 31 - 3auk

substitution effect

The substitution effect explains how people change their buying habits when the price of a product changes, while

The income effect explains how a change in the price of a product affects a consumer’s purchasing power

A budget line, also known as a budget constraint, shows all possible combinations of two goods that a

The law of diminishing marginal utility states that as a person consumes more units of a specific product,

Marginal utility is the extra satisfaction or benefit a person receives from consuming one additional unit of a

Total utility is the overall satisfaction or benefit a person gets from consuming a specific amount of a

Supply-side policies are government actions aimed at increasing the productivity, efficiency, and competitiveness of an economy. By improving

Monetary policy, which involves changes in interest rates and the money supply by a central bank, influences a

Fiscal policy refers to how a government uses taxation and government spending to influence the economy. This policy

The stability of the current account is an economic goal where a country aims to keep its balance