Free Trade Area
What is a Free Trade Area? A free trade area (FTA) refers to a specific region wherein a group of countries signs a trade agreement that seals the economic cooperation among them. The FTA’s main goals are to bring down barriers in trading, specifically tariffs and import quotas, and encourage the free trade of goods...
Economic Union
What is an Economic Union? An economic union is one of the different types of trade blocs. It refers to an agreement between countries that allows products, services, and workers to cross borders freely. The union is aimed at eliminating internal trade barriers between the member countries, with the goal of economically benefitting all the...
Flow of Funds Indicators
What are Flow of Funds Indicators? The flow of funds indicators are metrics used by governments to track the flow of money to and from the national economy. The accounts show the sources of all funds received in the economy and the uses they have been put to in the economy. The national government, investors,...
Economies of Scale
What are Economies of Scale? Economies of scale refer to the cost advantage experienced by a firm when it increases its level of output. The advantage arises due to the inverse relationship between the per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost. Economies...
Price Ceiling
What is a Price Ceiling? A price ceiling is a limit on the price of a good or service imposed by the government to protect consumers by ensuring that prices do not become prohibitively expensive. For the measure to be effective, the price set by the price ceiling must be below the natural equilibrium price....
