What is a Proportional Tax? Definition: Proportional tax, also referred to as flat tax, is a tax system whereby the same percentage tax rate is levied across all income brackets. In this case, low, middle, and high-income taxpayers are often hit with the same tax rate. The tax system differs from progressive or marginal tax
What is Unit Elastic? Definition: Unit elastic is a business concept that means a change in price of an item produces a proportional change in the demand/supply quantity of the item. If the price of an item changes by a small margin, the quantity of the item will also change by a small margin and
What is a Trade Embargo? Definition: A trade embargo is an order issued by a government barring the entry of specific types of imports from a specific country. In other words, the government of one country may decide not to allow trade with another country for whatever reasons, usually as a result of their political
What is Total Cost? Definition: In business, total cost is described as all the costs that a business or company encounters when it decides to produce goods or services at a particular output level. To most people, the term total cost is probably the final tally of the cost of their shopping when they visit
What is Specialization? Definition: Specialization is a concept that many companies and businesses take advantage of so that they can boost efficiency in their operations. Specialization is a scenario where individuals focus on specific tasks and are trained to perform those specific tasks. Picture a scenario where a vehicle manufacturer creates a production plant. It
What is a Supply Schedule? Definition: Supply schedule is an economic graph that depicts how the number of goods or services in the market relates to the price of those goods or services. Supply is a vital part of economics and this is evident by the fact that there is an entire segment about supply
What is Spending Multiplier? Definition: Spending multiplier is a concept in economics, which basically refers to the economic impact of increased government spending. It is the impact of government expenditure on a country’s GDP, and it cuts both ways, which means that it can cause a positive or a negative impact on the economy. Spending
What is Stagflation? Definition: Stagflation, a combination of stagnate and inflation, is a situation where an economy suffers from high levels of inflation, rising unemployment levels, and stagnating economic growth. Unsurprisingly, the term was coined to describe the effects of inflation and economic stagnation. High levels of inflation are not usually common in situations where
What is Real GDP? Definition: Real GDP (Gross Domestic Product) is an economic measurement that calculated the a country’s economic output adjusted for inflation. Gross Domestic Product (GDP) is the term that describes a country’s economic output or in simpler terms, the goods and services that are generated within a country over a specified duration
What is Quantity Supplied? Definition: Quantity supplied is one of the many concepts in economics, and this particular concept represents the amount or quantity of goods or services that producers or distributors are willing to provide to the market or consumers at a specific market price. When dealing with quantity supplied, the amount of goods