Absolute (Money) Price

Pure Economic Rent A category of
economic rent where the payment is to a
factor that is in fixed supply, implying that it
has zero opportunity costs.
Q
Quota A legal limit imposed on the
amount of a good that may be imported.
r
Rational Expectations Expectations that
individuals form based on past experience
and on their predictions about the effects
of present and future policy actions and
events.
Rational Ignorance The state of not
acquiring information because the costs o
Rationing Device A means for deciding
who gets what of available resources and goods.
Real Balance Effect The change in the
purchasing power of dollar-denominated assets
that results from a change in the price level.
Real GDP The value of the entire output
produced annually within a country’s
borders, adjusted for price changes.
Real Income Nominal income adjusted for
price changes.
Real Interest Rate The nominal interest
rate minus the expected inflation rate. When
the expected inflation rate is zero, the real
interest rate equals the nominal interest rate.
Recessionary Gap The condition in
which the Real GDP that the economy is
producing is less than the Natural Real GDP
and the unemployment rate is greater than
the natural unemployment rate.
Regressive Income Tax An income tax
system in which a person’s tax rate declines
as his or her taxable income rises.