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ZERO COUPON BOND: Also termed a zero bond, a bond that does not pay interest, in which the return is generated by the difference between the purchase price and the face value paid at maturity. Because they do not pay interest, zero coupon bonds are sold at a discount. For example, a $10,000 zero coupon bond that matures in one year, would generate a 10% return if it sold at a discount of $9,000.

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ACTIVIST POLICY: Government policies that involve explicit actions designed to achieve specific goals. A common type of activist policy is that designed to stabilize business cycles, reduce unemployment, and lower inflation, through government spending and taxes (fiscal policy) or the money supply (monetary policy). Activist policies are also term discretionary policies because they involve discretionary decisions by government. A contrast to activist policy is automatic stabilizers that help stabilize business cycles without explicit government actions.

     See also | business cycle | fiscal policy | monetary policy | stabilization policies | automatic stabilizers | discretionary | inflation | unemployment |


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ALLOCATION

The process of distributing resources for the production of goods and services, and of distributing goods and services for the satisfaction of wants and needs and human consumption. This allocation process is an essential part of an economy's effort to address the problem of scarcity.

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Today, you are likely to spend a great deal of time at a garage sale hoping to buy either a New York Yankees baseball cap or a solid oak entertainment center. Be on the lookout for telephone calls from long-lost relatives.
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The first paper notes printed in the United States were in denominations of 1 cent, 5 cents, 25 cents, and 50 cents.
"Anyone who has never made a mistake has never tried anything new. "

-- Albert Einstein, physicist

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