Economics Glossary: T -, Learning Economics... Solved!

Economics Glossary: T

Tariff – A tax on imports.

Tax incidence – The division of the burden of a tax between the buyer and the sellers in a market.

Tax multiplier – The ratio of change in the equilibrium level of GDP to a change in taxes.

Terms of trade – The ratio at which a country can trade its domestic goods and services for imported goods and services.

Tight monetary policy – Federal Reserve policies that contract the money supply and therefore raise the interest rates in an attempt to contract the economy and fight inflation. 

Time lags – Delays in the economy’s response to government policies.

Time series graph – A graph that shows how a variable changes over time.

Total cost – The cost of all of the factors of production that are being used by a firm.

Total fixed cost – The cost of a firm’s fixed factors of production that are being used.

Total product – The total quantity of a good or service that is produced within a given time period.

Total revenue – The amount spent on a good or service that is received by the seller.  Total revenue will equal the price of the product multiplied by that total amount of the product that is sold.

Total revenue test – A method of estimating the price elasticity of demand by noting whether total revenue increases or decreases given a price change. 

Total surplus – The sum of consumer and producer surplus.

Total variable cost – The cost of a firm’s variable factors of production.

Trade deficit – This occurs when a country’s exports of goods and services have a lower value than its imports of goods and services within a given period of time.

Trade feedback effect – The tendency for an increase in the economic situation of one country to lead to a worldwide increase of economic activity, which can then feed back to the original country.

Trade surplus – When a country exports a higher value than the value of its imports.

Tradeoff – An exchange, or opportunity cost.  The thing you give up (money/time or something else) to get something.

Tragedy of commons – When collective ownership of a property may not provide the incentives necessary for efficiency because individuals do not bear the true costs of their actions individually.

Transaction motive – The main reason that people  have to hold money, to make purchases of goods and services.

Transactions costs – The opportunity costs of making trades in a market or from conducting a transactions.

Transfer payments – Cash payments from the government to people not in exchange for goods, services, or labor.  Transfer payments include welfare, veteran’s benefits, and social security.

Transfer payments multiplier – The effect that a change in transfer payments has on aggregate demand.

Treasury bonds, treasury notes, treasury bills – These are promissory notes issued by the federal government when it borrows money.

Trend – The general tendency for the value of a variable to rise or fall over time.

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