Search Council for Economic Education's full glossary for terms and definitions


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Macroeconomic Equilibrium

The equilibrium level of output and the price level where aggregate demand equals aggregate supply.

Macroeconomic Indicators

Macroeconomic Policies

Government actions designed to affect economic activity in an attempt to reach one or more macroeconomic goals, such as reducing unemployment and inflation. Also called economic policies, the most common types are fiscal policy and monetary policy.


The study of economics concerned with the economy as a whole, involving aggregate demand, aggregate supply, and monetary and fiscal policy.

Maintaining Competition

Maintaining Regulation

Margin requirement

Marginal Analysis

A decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs.

Marginal Benefit

The additional gain from consuming or producing one more unit of a good or service; can be measured in dollars or satisfaction.

Marginal Cost

The increase in a producer's total cost when it increases its output by one unit.

Marginal Physical Product (MPP)

The additional quantity that is produced when one additional unit of a resource is used in combination with the same quantities of all other resources.

Marginal Propensity to Consume (MPC)

Change in consumption as a proportion of change in disposable income; the ratio of the change in consumption to the change in disposable income that produces the change in consumption.

Marginal Propensity to Save (MPS)

Change in saving as a proportion of change in disposable income; the ratio of the change in saving to the change in disposable income that produces the change in saving.

Marginal Resource Product

Marginal Revenue (MR)

The addition to a producer's total revenue resulting from the addition of one unit to total output.

Marginal Revenue Product (MRP)

The change in the total revenue of the firm when it employs one additional unit of a resource.

Marginal tax rate (or ratio)

Marginal Utility

The extra value or satisfaction that a consumer obtains from consuming one additional unit of output.


Market Economy

An economy that relies on a system of interdependent market prices to allocate goods, services, and productive resources and to coordinate the diverse plans of consumers and producers, all of them pursuing their own self-interest.

Market Failures

The systematic overproduction or underproduction of some goods and services that occurs when producers or consumers do not have to bear the full costs of transactions they undertake. Usually related to externalities or the need for public goods.

Market order

Market Price Risk

The chance that the value of an investment will go down because of a change in supply and demand.

Market Structure

The degree of competition in a market, ranging from many buyers and sellers to few or even single buyers or sellers.


Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.



Median Income

The middle value or midpoint of incomes of people in a specified area where half of the incomes are above the middle value and half of the incomes are below it.


A federal health-care program that pays for certain medical and hospital costs for people aged 65 and older (and for some people who are under the age of 65 and disabled). Part of Social Security.

Medium-Term Goal

Something a person or organization plans to achieve from one to five years in the future.


The study of economics concerned with individual units of the economy such as households, firms and markets; with how prices and outputs are determined in those markets; and with how the price mechanism allocates resources and distributes income.

Minimum Payment

In a credit arrangement, the lowest amount that a borrower must pay toward the credit balance each month in order to avoid a penalty.

Monetarist Theory

A school of thought that emphasizes the role changes in the money supply play in determining national income and price level. Monetarists argue that in the long run only changes in the money supply change the price level.

Monetary Incentive

A factor related to money, income or economic wealth that encourages people to do something.

Monetary Policy

Changes in the supply of money and the availability of credit initiated by a nation's central bank to promote price stability, full employment and reasonable rates of economic growth.


Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Money Management

A system for income and spending that allows for the achievement of financial and consumer goals.

Money Market Account

An interest-bearing account similar to a checking account. Deposits may be added at any time; some money market accounts limit the withdrawals depositors may make without paying a penalty. Also known as money market deposit account.

Money Market Deposit Account

An interest-bearing account similar to a checking account. Deposits may be added at any time; some money market deposit accounts limit the withdrawals depositors may make without paying a penalty. Also known as money market account.

Money market fund

Money Market Mutual Fund (MMMF)

A fund restricted by law to investing in the short-term money market. MMMFs provide low risk and low returns, but they maintain their investment value.

Money Order

A certificate purchased for a specific amount of money and signed over by the purchaser to the person or business named on the certificate.

Money Supply

Narrowly defined by economists as currency in the hands of the public plus checking-type deposits; also called M1. Other definitions of the money supply (M2, M3) include various savings deposits, money market deposits and money market mutual fund balances.


Monopolistic Competition

A market structure in which slightly differentiated products are sold by a large number of relatively small producers, and in which the barriers to new firms entering the market are low.


A market structure in which there is a single supplier of a good or service. Also, a firm that is the single supplier of a good or service for which there are no close substitutes; also known as a monopolist.


A market situation in which there is only one buyer of a resource. Also, a firm that is the only buyer of a resource; also known as a monopsonist.


A special type of loan for the purchase of a house or other real estate.

Multinational Corporation

A corporation that operates in two or more countries.

Multiplier Effect

The idea that a small increase in spending by consumers, businesses or government can cause large changes in economic production. The multiplier also works in reverse when spending decreases.

Municipal bond

Mutual Fund

A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.