Question

The glossary assignment is divided into three parts and spread out throughout different units. The second covers terms from F to L. Please use your online research skills to define each term in one to three sentences and provide a brief example in your own words.

Write in your own words and a clear example. You will receive zero if you merely cut and paste a definition. Use the examples listed above to guide you regarding length and complexity.

Treat this as preparation for the unit test.

• Mixed Economy
• Monopoly
• NGO
• Opportunity cost
• Protectionism
• Recession
• Recovery
• Sanction
• Trade Balance
• Trading Bloc
• Trade Surplus
• Trade War

Answer 1

Mixed Economy:

As the name suggests, a mixed economy is a type of economic system which combines the elements of both a planned economy and a capitalist economy. That is, this economic structure involves both the government and the private players equally in all decision-making processes.

E.g. US is a mixed economy

Monopoly:

It is a type of market structure which consists of a single seller controlling the entire market. The seller produces a unique product, which does not have close substitutes to it and sells it to a large number of buyers. These markets operate for profit maximization and have high barriers to entry and exit

E.g. DeBeers for diamonds

NGO:

NGO stands for Non-governmental organizations. These organizations are not for profit organizations which run independently of government intervention and usually carry out humanitarian and charitable work for social welfare.

E.g. Greenpeace is a world-famous NGO in the field of environmental protection and preservation

Opportunity cost:

It refers to the cost of foregone alternative. It is the benefits lost when a decision is made instead of the former decision.

For e.g. if an individual decides to study work instead of working, then his opportunity cost would be his foregone wages from working which he lost

Protectionism:

As the name suggests, it is a practice by countries engaging in international trade to protect their domestic industries from foreign competition by imposing trade barriers to reduce trade.

E.g. tariffs on imports are a type of trade barrier

Recession:

It refers to a phase of business cycle when economic activities contract and there is a widespread fall in consumer spending, prices and GDP.

E.g. US suffered a massive recession in 2009 after the housing bubble burst

Recovery:

This stage follows recession. In this, the economic activities start improving after a period of downfall or recession.

E.g. the US economy is in a recovery phase currently, after phasing recession in 2009

Sanction:

These are penalties imposed by countries against a certain group or individuals for the purpose of national security.

Trade Balance:

Numerically, trade balance means when exports equal imports. At this point, money coming in equals money going out in trade, such that trade is balanced.

Trading Bloc:

It is a type of mutual agreement among countries or regions to form a bloc among themselves to reduce trade barriers and increase trade among themselves, exclusing rest of the world.

E.g. NAFTA is a trading bloc between US, Canada and Mexico

Trade Surplus:

Trade is said to be in surplus when exports exceed imports. That is, money coming in from trade is greater than money going out for payments for imports.

Trade War:

It is a trading conflict among countries or states who impose trade barriers among each other with the purpose of blocking trade, by providing the reason of protection of national interest and domestic industries

E.g. US and China are currently at trade war, with both imposing high tariffs on imports from each other.