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grants economics (H3)<br />A type of economics examining both twoway transfers (exchanges) and one-way transfers (grants). To understand grants is to be able to comprehend the nature of much of fiscal policy, as it is concerned with providing TRANSFER INCOMES for persons who exchange nothing for them, and of expenditure programmes which create social goods. This type of economics is also useful in the analysis of international aid.<br /><em>Reference</em><br />Boulding, K.E. (1973) The Economy of Love and Fear: A Preface to Grants Economics, Belmont, CA: Praeger.

liquid market (G1)<br />A market where buying and selling are easy and low cost with the consequence that prices tend to their underlying values.
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<strong>AGI</strong> – Adjusted Gross Income, an income figure on federal tax returns used to perform need analysis and verification.

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<strong>MIME</strong> – Multi-purpose Internet Mail Extensions, a standard messaging protocol used to exchange text in languages with different character sets and multi-media email among many different computer systems that use internet mail.

<strong>Consolidation</strong> – The combining of existing federal student loans into one new loan with an interest rate equal to the weighted average of the loans being consolidated. Consolidation can result in lower monthly payments but higher total debt.
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agribusiness (Q1)<br />A large organization which processes or distributes agricultural products. It benefits from ECONOMIES OF SCALE and is managed as an industrial firm, separating personnel, marketing, finance and production functions.<br /> <br /><em>Reference</em><br />Davis, J.H. and Goldberg, R.A. (1957) A Concept of Agribusiness, Cambridge, MA: Harvard University Press; London: Barley & Swinfen.
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<strong>Origination Fee</strong> – A fee charged to offset the federal government' s cost of interest subsidies (for subsidized Federal Stafford Loans) and reinsurance payments for loans that either default or are eligible for forgiveness or discharge. This fee, if charged to the borrower, may be subtracted from the borrower' s loan proceeds at the time of disbursement.

golden age (04)<br />A period of steady growth with continuous full employment. In this age, the WARRANTED RATE OF GROWTH is equal to the NATURAL RATE OF GROWTH.<br /> <br /><em>Reference</em><br />Robinson, J. (1962) Essays in the Theory of Economic Growth, London: Macmillan.
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earmarking (H5)<br />The allocation of public revenue exclusively to the execution of a particular function of government, e.g. using the proceeds of television licences in the UK to finance the British Broadcasting Corporation. Some governments have rejected this approach because of the inflexibility it introduces into public finances, arguing that different types of public expenditure grow at different rates from various tax revenues. Nevertheless, the principle is often followed in social expenditure and is a method of controlling it.<br /><em>See also:</em> dedicated budget; ringfencing; trust fund

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first economy (P2)<br />A socialist economy following the dictates of the national plan. It consists of governmental agencies, state-owned firms, cooperatives and other officially registered institutions.<br /><em>See also:</em> second economy

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hybrid income tax (H2)<br />A combination of a comprehensive rNCOME TAX and an EXPENDITURE TAX. It was gradually introduced in Japan to encourage savings, e.g. in the form of tax-exempt savings and flat rate capital gains tax.<br /><em>See also:</em> double taxation of savings
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capital transfer tax (H2)<br />UK tax introduced in 1975 on transfers of wealth payable by the donor or recipient during life or at death. Estate duty, in force from 1894 to 1975, was the predecessor of this tax.

Commons, John Rogers, 1862-1945 (B3)<br />US economist who was born in Hollandsburg, Ohio, and a founder of INSTITUflONAL economics. Although educated as a graduate student at Johns Hopkins University, he was never able to finish a college or university degree course. He held academic posts at Wesleyan University and Syracuse University. Much of his life was spent in empirical work in Wisconsin, constructing an index of wholesale prices, investigating labour unions and investigating the economic concepts present in legal reasoning. He took as the foundation of economics volitional theories of value and cost, rather than those based on Uf!LITY or a coMMODITY. He used US Supreme Court cases to establish the working rules which guide and restrain individuals in transactions, the key units of economics. 'Value' and 'economy' were treated as the transactions of millions of people engaged in valuing and economizing. His legal researches also led him to analyse the nature of bargaining power.<br /><em>See also:</em> Ayres; Galbraith; Veblen <br /><em>Reference</em><br />Commons, J.R. (1893) The Distribution of Wealth, New York: Macmillan.<br /> - (1905) Trade Unions and Labor Problems, Boston: Ginn.<br /> - (1924) The Legal Foundations of Capitalism, New York: Macmillan.<br /> - (1934) Institutional Economics: Its Place in Political Economy, New York: Macmillan.<br /> - (1934) Myself, New York: Macmillan. Harter, L.G. (1962) John R. Commons: His Assault on Laissez-Faire, Corvallis, OR: Oregon State University Press.<br /> Rutherford, M.H. (1983) 'J.R. Commons' institutional economics', Journal of Economic Issues 17: 721-44.

<strong>Grade level</strong> – A student' s academic class level, as certified by a school official. Undergraduate students are assigned a level of 01 (freshman) through 05 (5th year senior). Graduate students are assigned a level A (first year graduate) through D (fourth year and beyond).

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optimum tariff (Fl, F3)<br />1 The tariff that will maximize the economic welfare of a country. Providing it is a large economy and the elasticity of supply is less than infinite, through changing the TERMS OF TRADE by imposing a ta riff it is possible to have increased revenue from trade despite its lower volume.<br /> 2 A TARIFF that increases a country's welfare by maximizing the return to its potential MONOPOLY or MONOPSONY power. This ta riff must be set at that rate which equalizes the social benefit and social cost of the marginal import. Optimum ta riffs have been recommended for less developed countries with a substantial monopoly in their export trade. If the optimum tariff is zero, then there is a strong case for FREE TRADE. Corden refers to an 'orthodox optimum tariff' as an export tax which changes the TERMS OF TRADE as the tax rest ricts exports and raises their prices.<br /> <br /><em>Reference</em><br />Corden, W.M. (1974) Trade Policy and Economic Welfare, Oxford: Clarendon Press.

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Agricultural Adjustment Act 1933 (Q1)<br /> The basis of US federal support to farmers which has provided price support to maintain farm incomes. It created the COMMODITY CREDIT CORPORATION to execute its policy.
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loan stock (G1)<br />A stock exchange security with a fixed rate of interest and, usually, prior entitlement to payment out of any available earnings.<br /><em>See also:</em> debenture

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market adjustment (DO)<br />The changes in prices and quantities arising from changes in demand and supply of a market.

multiple unit auction (DO)<br />A sale of identical units of a good in which the buyers can bid for only one, or less than the total number. There is no reserve price or minimum bid.

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