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ALLOCATION EFFECT: The goal of imposing taxes to change the allocation of resources, that is, to discourage the production, consumption, or exchange or one type of good usually in favor of another. This is one of two reasons that governments impose taxes. The other reason is the revenue effect. Because people would rather not pay taxes, taxes create disincentives to produce, consume, and exchange. If society deems that less of a particular good, such as alcohol, pollution, or cigarettes are "bad," then a tax can reduce its production and consumption, and thus change the allocation of resources.
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FREE MARKET: A competitive market that is unrestrained by government control or regulations, especially price floors, price ceilings, or taxes. In such a market the forces of demand and supply eliminate any shortages and surpluses move the market to the equilibrium price and quantity. If the free market is competitive (with large numbers of buyers and sellers) and is not infected with other market failures, such as externalities, then equilibrium price results with equality between the demand price and the supply price. This means that equilibrium is also efficient. See also | market | competition | price floor | price ceiling | tax incidence | competition | externalities | market failure |
Recommended Citation:FREE MARKET, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2019. [Accessed: August 17, 2019].
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COINCIDENT ECONOMIC INDICATORS Four economic statistics that tend to move up or down along WITH business-cycle expansions and contractions. Most importantly, these measures indicate peak and trough turning points when they actually occur. Coincident economic indicators are one of three groups of economic measures used to track business-cycle activity. The other two are leading economic indicators and lagging economic indicators.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages trying to buy either 500 feet of coaxial cable or a coffee cup commemorating the 1960 Presidential election. Be on the lookout for rusty deck screws.
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The wealthy industrialist, Andrew Carnegie, was once removed from a London tram because he lacked the money needed for the fare.
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"The work of the individual still remains the spark that moves mankind forward. " -- Igor Sikorsky, aeronautical engineer
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ISMA
International Securities Market Association
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