Glossary

Abatement technology

A production technology that reduces or prevents pollution. (p. 249)

Ability-to-pay principle

The proposition that people should pay taxes according to how easily they can bear the burden. (p. 206)

Absolute advantage

When one person (or nation) is more productive than another—needs fewer inputs or takes less time to produce a good or perform a production task. (p. 73)

Adverse selection

The tendency for people to enter into transactions that bring them benefits from their private information and impose costs on the uninformed party. (p. 297)

Aggregate demand

The relationship between the quantity of real GDP demanded and the price level when all other influences on expenditure plans remain the same. (p. 756)

Aggregate ...

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