NCERT Class 12 Economics Introductory Macroeconomics Glossary

Adam Smith (1723 – 1790) Regarded as the father of modern Economics. Author of Wealth of Nations.
Aggregate monetary resources Broad money without time deposits of post office savings organisation (M3).
Automatic stabilisers Under certain spending and tax rules,expenditures that automatically increase or taxes that automatically decrease when economic conditions worsen, therefore, stabilising the economy automatically.
Autonomous change A change in the values of variables in a macroeconomic model caused by a factor exogenous to the model.
Autonomous expenditure multiplier The ratio of increase (or decrease) in aggregate output or income to an increase (or decrease) in autonomous spending.
Balance of payments A set of accounts that summarise a country’s transactions with the rest of the world.
Balanced budget A budget in which taxes are equal to government spending.
Balanced budget multiplier The change in equilibrium output that results from a unit increase or decrease in both taxes and government spending.
Bank rate The rate of interest payable by commercial banks to RBI if they borrow money from the latter in case of a shortage of reserves.
Barter exchange Exchange of commodities without the mediation of money.
Base year The year whose prices are used to calculate the real GDP.
Bonds A paper bearing the promise of a stream of future monetary returns over a specified period of time. Issued by firms or governments for borrowing money from the public.
Broad money Narrow money + time deposits held by commercial banks and post office savings organisation.
Capital Factor of production which has itself been produced and which is not generally entirely consumed in the production process.
Capital gain/loss Increase or decrease in the value of wealth of a bondholder due to an appreciation or reduction in the price of her bonds in the bond market.
Capital goods Goods which are bought not for meeting immediate need of the consumer but for producing other goods.