ECONOMICS

PROJECT
 DEFINITIONS

*National budget- What is a National Budget?

A National Budget is a projection of the government’s revenues and expenditure for a
particular period of time often referred to as a financial or fiscal year, which may not
correspond with the calendar year. It includes the amount of money it has [based on taxes
and other measures] and how it plans to spend that money in a given year on goods,
services, and transfer payments.
*National Income- What is a National Income?
National Income is the total market value of production in a country’s economy during a
year. A National Income is used in economics to estimate total economic activity in a
country or region including gross domestic product, gross national product, net national
income and adjusted national income.
*Disposable Income- What is a Disposable Income?
A Disposable income is total personal income minus current income taxes. Also it is the
amount of money that an individual or household has to spend or save after income taxes
have been deducted.
*National Debt- What is the National Debt?
A National Debt is the amount of money the federal government has borrowed to cover the
outstanding balance of expenses incurred over time.
*Fiscal Policy- What is a fiscal policy?
A Fiscal policy is the use of Government spending and taxation to influence the economy.
*Fiscal deficit- What is a fiscal deficit?
A Fiscal Deficit is a shortfall in a government’s income compared with its spending.
*Monetary Policy- What is a monetary policy?
A Monetary Policy is a set of actions to control a nation’s overall money supply and achieve
economic growth.
*Economic Growth- What is an Economic Growth ?
An Economic Growth is an increase refers to an increase in the size of a country’s economy
over a period of time.
*Economic Development- What is an Economic Development?
`deals with economic aspects of the development process in low- and middle- income
countries.
*Developing Economy- What is a Developing Economy?
A developing Economy is once referred to as lesser-develpoed economies (LDCs), are
characterized by a poor infrastructure, inferior growth rates, an imbalanced econmy, and
extremely low personal incomes
*Developed economy- What is a developed economy?
A Developed Economy is a region, typically a country, with an abundance of wealth and
resources available to its residents or citizens.
*Balance of Payments- What is the balance of payments?
The balance of payments summaries the economic transactions of an economy with the rest
of the world.
*G.D.P- What is GDP?
GDP which stands Gross domestic product is the total monetary or market value of all the
finished goods and services produced within a country’s borders in a specific time period.
*GNP- What is GNP?
GNP The term national income is sometimes used to describe different metrics or concepts,
the most common ones being Gross National Product (GNP) and Gross National Income
(Gross National Income).

*Employment-What is Employment?
Employment is the state of anyone is doing what, under the circumstances, he most wants
to do.
*Unemployment- What is Unemployment?
Unemployment occurs when a person is WILLING and ABLE to work but does not have a
paid job
*Inflation- What is Inflation?
Inflation is the rate of increase in prices over a given period of time
*Deflation- What is deflation?
Deflation is when the prices of goods and services decrease across the entire economy,
increasing the purchasing power of consumers
*Savings- What is savings?
Savings is the portion of income not spent on current expenditures
*Closing Economy- What is Closing Economy?
Closing Economy refers to a country that produces all of its own goods and services and
doesn’t participate in the international trade
*Open Economy- What is an Open Economy?
An open economy is one that interacts freely with other economies around the world
*Reserve Ratio- What is a Reserve Ratio?
A Reserve Ratio set by the central bank, is the percentage of a commercial bank’s deposits
that it must keep in cash as a reserve
*Moral Suasion- What is a Moral Suasion?
The Moral Suasion under the economics is defined as the attempt to coerce private
economic activity through government exhortation in ways not already defined or dictated
by the existing statute law
*Interest Rate- What is Interest Rate?
Interest Rate is the amount charged over and above the principal amount by the lender
from the borrower.
*Open Market- What is an Open market?
An open market is an economic system with little to no barriers to free- market activity
PURPOSES
*National Budge- It is presented to allow scrutiny (by taxpayers, voters and legislature) of
the resources raised by government and the uses to which these will be put
*National Income- It is the throw light on aggregate output and income and provide a basis
for the government to formulate its policy, programs, to maximize the national welfare of
the people
*Disposable Income- It drives how much consumers spend , how much companies earn
and how much people save
*National Debt-It enables the federal government to pay for important programs and
services even if it does not have funds immediately available
*Fiscal Policy- It is used to promote strong and sustainable growth and reduce poverty
*Fiscal Deficit- It can boost a sluggish economy by giving individuals more money to buy
and invest more
*Monetary Policy-It is to keep a nation’s economy stable while limiting inflation and
unemployment
*Economic Development- The purpose of economic development is to improve the well-
being and prosperity of a nation, region, or community through various strategies and
initiatives aimed at fostering sustainable economic growth and enhancing the standard of
living for its citizens.
*Developing Economy The development of a strong and vibrant economy is vital as it not
only raises living standards but also fosters stability, innovation, and opportunities for a
nation's citizens, ultimately contributing to its overall prosperity and global
competitiveness
*Developed economy
The purpose of a developed economy is to provide its citizens with a high quality of life,
economic stability, advanced infrastructure, and opportunities for innovation and growth,
positioning the nation as a global leader in various sectors.
Balance of Payments-
G.D.P- The purpose of GDP (Gross Domestic Product) is to measure the total economic
output of a country within a specific time frame, providing a key indicator of its economic
health and performance.
GNP
The purpose of Gross National Product (GNP) is to measure the total economic output or
production of goods and services within a country's borders, including the income
generated by its citizens and businesses both domestically and abroad, providing a
comprehensive assessment of a nation's economic performance
Employment- The purpose of employment is to provide individuals with the opportunity to
earn a livelihood by engaging in productive work, contributing to economic growth, and
fostering personal and societal well-being
Unemployment- The purpose of addressing unemployment is to reduce the economic and
social hardships faced by individuals who are willing and able to work but cannot find
suitable employment, aiming to achieve greater economic stability and social equity within
a society.
Inflation- The importance of inflation lies in its role as an economic indicator and policy
tool, as moderate inflation can stimulate economic growth, while high or unpredictable
inflation can erode purchasing power and disrupt financial stability, making it essential for
central banks and policymakers to manage it effectively
Deflation- The purpose of deflation, from an economic perspective, is not inherently
positive; instead, it often arises as an undesirable consequence of economic downturns and
can lead to reduced consumer spending, lower investment, and economic stagnation,
requiring intervention to restore stability
Savings- The purpose of savings is to set aside a portion of one's income for future needs,
emergencies, and long-term goals, ensuring financial security, stability, and the ability to
achieve desired objectives.
Closing Economy- The purpose of closing an economy, typically during extreme
circumstances like a pandemic or national emergency, is to limit the spread of disease or
address a critical crisis by restricting activities and movement to protect public health and
ensure the well-being of citizens
Open Economy- The purpose of an open economy is to facilitate international trade and
investment by allowing the free flow of goods, services, and capital across national borders,
which can lead to increased economic growth, efficiency, and access to a wider range of
products and resources
Reserve Ratio- The purpose of a reserve ratio, set by central banks, is to regulate and
control the amount of money that commercial banks must hold in reserves, ensuring
financial stability, managing inflation, and influencing the overall money supply within an
economy
Moral Suasion- The purpose of moral suasion is to influence or persuade individuals,
organizations, or the public to adopt certain ethical or moral principles, behaviors, or
actions without resorting to legal or coercive measures, often used in the context of
encouraging responsible conduct and compliance with societal norms.
Interest Rate- The purpose of interest rates is to serve as a monetary policy tool that
influences borrowing, lending, and spending behaviors within an economy, helping central
banks manage inflation, stimulate economic growth, and maintain financial stability
Open Market- The purpose of an open market is to facilitate the buying and selling of goods,
services, or financial instruments, allowing for efficient price discovery, competition, and the
allocation of resources in an economy