James d. Gwartney

random walk theory: The theory that current stock prices already reflect all known
information about the future. Therefore the future movement of stock prices will be determined
by surprise occurrences, which will cause prices to change in an unpredictable or random
fashion. 
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rate of return: The amount of profit that an investment earns calculated as a percentage of the

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money that was originally invested. 
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rational ignorance effect: Voter ignorance resulting from the fact that people perceive their
individual votes as unlikely to be decisive. Therefore they are rational in having little incentive
to seek the information needed to cast an informed vote. 
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real value: The value adjusted for inflation. 
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realtor commissions: A fee paid to a real estate agent or broker for their services—sometimes
a percentage of the sale price, but also as a different fee model. 
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recession: A downturn in economic activity characterized by declining real gross domestic
product (GDP). As a rule of thumb, economists define a recession as two consecutive quarters
in which there is a decline in real GDP. 
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reform: An action by the government to make changes in something (especially an institution
or practice) in order to improve it. 
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rent-seeking: Actions by individuals and interest groups designed to restructure public policy
in a manner that will either directly or indirectly redistribute more income to themselves. 
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resource: An input used to produce economic goods and services. Natural resources, labor,
skills, entrepreneurial talent, and capital are examples. Human history is a record of our
struggle to transform available, but limited, resources into things that we would like to have
(economic goods). 
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rule of law: The effective understanding that everyone is subject to the same laws, preventing
some from enacting laws that they will not have to abide by. 
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saving: The portion of after-tax income that is not spent on consumption. 
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