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

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An electronic marketplace enabling buyers and sellers to get together via computer and hundreds of thousands of miles of high-speed data lines to trade stocks. NASDAQ used to be the acronym for National Association of Securities Dealers Automated Quotation System.

The total amount owed by the national government to those from whom it has borrowed to finance the accumulated difference between annual budget deficits and annual budget surpluses; also called public debt.

An industry in which the advantages of large-scale production make it possible for a single firm to produce the entire output of the market at a lower average cost than a number of firms each producing a smaller quantity.

"Gifts of nature" that can be used to produce goods and services; for example, oceans, air, mineral deposits, virgin forests and actual fields of land. When investments are made to improve fields of land or other natural resources, those resources become, in part, capital resources. Also known as land.

A negative side effect that results when the production or consumption of a good or service affects the welfare of people who are not the parties directly involved in a market exchange. Sometimes referred to as "third-party cost" or "spillover cost," it is a cost imposed on third parties by the production or consumption of other parties.

Exports minus imports.

The amount of money a person receives within a pay period after taxes and other deductions are taken out of his or her paycheck.

The current value of a person's assets minus liabilities.

A school of thought that holds that people's expectations are important and therefore government policies will have a limited effect on the business cycle since individuals and firms will take government policies into account when making decisions. Changes in real national income are a product of unexpected changes in the level of prices.

The oldest stock exchange in the United States, founded in 1792.

The total market value, measured in current prices, of all final goods and services produced in a nation during a given period of time, usually one year.

The rate of return from an investment before adjusting for inflation.

A factor not related to money, income or economic wealth that encourages people to do something.

Competition by firms trying to attract customers by methods other than reducing prices; examples include advertising and promotional gifts.

A term or notation used by banks in reference to checks written for more than the balance in a bank customer's checking account. An NSF is, in colloquial terms, a check that bounces. Banks charge penalty fees for NSF checks.

A property of certain goods and services such that (once the goods or services are provided) they cannot be denied to or withheld from people who have not paid for the goods or services; examples include street lights and national defense.

An organization that is exempt from federal (and sometimes state) taxes; receives income from donors, subsidized beneficiaries and, indirectly, taxpayers; and therefore should provide its goods or services free or below cost.

A commodity whose quantity demanded goes up when the consumer's real income rises.

Profits just high enough to compensate producers for the explicit and implicit costs (including opportunity costs) they incur in producing a particular good or service, without leading to any net entry or exit by producers in that market. Also called normal profits. Normal profits are an economic cost of production; they mark a point at which any lower level of profit would lead a producer to pursue some other use of his or her resources.