Glossary

• After-Tax Income: Total annual income after federal and provincial taxes
have been deducted
• Average Mean: An average income figure that is calculated by dividing
total income by the total population.

• Balanced Budget: A balanced budget is a situation in financial planning

or the budgeting process where total revenues are equal to or greater
than total expenses.
• Bank Rate: The interest rate at which a nation's central bank lends money
to domestic banks, often in the form of very short-term loans.

• Canadian Pension Plan: One of three levels of Canada's retirement

income system, which is responsible for paying retirement or disability
benefits.

• Chartered Banks: A financial institution, whose primary roles are to

accept and safeguard monetary deposits from individuals and
organizations, and to lend money out.
• Complementary Goods: Material or good whose use is interrelated with
the use of an associated or paired good such that a demand for
one generates demand for the other.
• Defecit Budget: More spending than there is revenue available to pay
for the spending, over a specific period of time.
• Democracy: A system of government by the whole population or all the
eligible members of a state, typically through elected representatives.
• Demographics: A particular sector of a population.

• Direct Tax: A tax, such as income tax, that is levied on the income or
profits of the person who pays it, rather than on goods or services.
• Economy: The wealth and resources of a country or region, especially in
terms of the production and consumption of goods and services.
• Efficient: Achieving maximum productivity with minimum wasted effort or
expense.
• Excess Reserves: Capital reserves held by a bank or financial institution
in excess of what is required by regulators, creditors or internal controls

• Exports: An international transaction in which a foreign currency is

converted into a domestic one in order to purchase a domestic good.
• Externality: A side effect or consequence of an industrial or commercial
activity that affects other parties without this being reflected in the cost of
the goods or services involved.

• Full Employment: The condition in which virtually all who are able and
willing to work are employed.
• GDP Gap: The disparity between an economy's actual total output and
its possible total output.
• Gross Domestic Product: The total value of goods produced and services
provided in a country during one year.
• Growth: An increase in the amount of goods and services produced per
head of the population over a period of time.

• Hidden Unemployment: The unemployment or underemployment of

workers that is not reflected in official unemployment statistics because of
the way they are compiled.

• Human Capital: The skills, knowledge, and experience possessed by an

individual or population, viewed in terms of their value or cost to an
organization or country.

• Imports: An international transaction in which a domestic currency is

converted into a foreign one in order to purchase a foreign good.
• Income Tax: Tax levied by a government directly on income, especially
an annual tax on personal income.
• Inflow: A large amount of money, people, or water, that moves or is
transferred into a place.

• Interest Rate: The amount charged, expressed as a percentage of

principal, by a lender to a borrower for the use of assets.
• Investment: The purchase of goods that are not consumed today but are
used in the future to create wealth
• Labour Force: All the members of a particular organization or population
who are able to work, viewed collectively.
• Long Run: The long run is a period of time in which all factors of
production and costs are variable.

• Marginal Social Cost: The additional cost to society in terms of an

increase in pollution caused by an increase in production.

• Market Demand: The aggregate of the demands of all potential

customers (market participants) for a specific product over a specific
period in a specific market.

• Median: An average income that represents the middle income, dividing

an economy's range of incomes into two equal parts.

• Mercantilism: The economic theory that trade generates wealth and is

stimulated by the accumulation of profitable balances, which a
government should encourage by means of protectionism.
• Minimum Wage: The lowest wage permitted by law or by a special
agreement (such as one with a labor union).
• Mixed Market Economy: A system that combines characteristics
of market, command and traditional economies.
• Money: A current medium of exchange in the form of coins and
banknotes; coins and banknotes collectively.

• NAFTA: An agreement among the United States, Canada and Mexico

designed to remove tariff barriers between the three countries.
• Negative Externality: A side effect of production that imposes a cost
upon a third party.

• Oligopoly: A state of limited competition, in which a market is shared by

a small number of producers or sellers.

• Outflow: A large amount of money, liquid, or people that moves or is

transferred out of a place.

• Outputs: The amount of something produced by a person, machine, or

industry.
• Overnight Rate Target: The interest rate at which a depository institution
(generally banks) lends or borrows funds with another depository
institution in the overnight market.

• Participation Rate: A measure of the active portion of an economy's

labor force. It refers to the number of people who are either employed
or are actively looking for work.

• Price Floor: A price floor is a government- or group-imposed pricecontrol

or limit on how low a price can be charged for a product.
• Production Possibility Curve: Depicts all maximum output possibilities for
two goods, given a set of inputs consisting of resources and other
factors.
• Productivity: The effectiveness of productive effort, especially in industry,
as measured in terms of the rate of output per unit of input.
• Progressive Tax: A progressive tax is a tax that takes a larger
percentage from high-income earners than it does from low-income
individuals.
• Protectionist: Relating to the theory or practice of shielding a country's
domestic industries from foreign competition by taxing imports.

• Regressive Tax: A regressive tax is a tax imposed in such a manner that

the tax rate decreases as the amount subject to taxation increases.
• Self - Interest: One's personal interest or advantage, especially when
pursued without regard for others.

• Spillover Costs: Costs that are borne by a third party rather than
consumers and producers of the product; also called neighbourhood
effects.

• Store of Value: The function of an asset that can be saved, retrieved and
exchanged at a later time, and be predictably useful when retrieved.
• Strike: Undertake an organized protest against (an employer).
• Substitute Goods: Products that a consumer perceives as similar or
comparable, so that having more of one product makes them desire less
of the other product.
• Tariff: A tax or duty to be paid on a particular class of imports or
exports.

• Tariff: A tax or duty to be paid on a particular class of imports or

exports.
• Technological Unemployment: The loss of jobs caused by technological
change. Such change typically includes the introduction of labour-
saving machines or more efficient processes (automation).
• Terms of Trade: The ratio of an index of a country's export prices to an
index of its import prices.

• Total Revenue: The total receipts from sales of a given quantity of goods
or services.

• Unemployment Rate: A measure of the prevalence of unemployment and

it is calculated as a percentage by dividing the number of unemployed
individuals by all individuals currently in the labor force.

• Union: An organized association of workers formed to protect and

further their rights and interests; a labor union.
• Variable Cost: A cost that varies with the level of output.
• Wages: A fixed regular payment, typically paid on a daily or weekly
basis, made by an employer to an employee, especially to a manual or
unskilled worker.

• Wealth: Accumulated assets of individuals and families less their total

debts.
• World Trade Organization: A global international organization dealing
with the rules of trade between nations. At its heart are the WTO
agreements, negotiated and signed by the bulk of the world's trading
nations and ratified in their parliaments.