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Economic Terms

All   0-9   A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Satisficing

Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met.

Below is an illustration that satisficing always leads to a choice which lies somewhere between a satisfying outcome and one which will suffice i.e. making the best decision a person can make. For instance, an individual wishing to purchase a high quality good with a low price will often find it very difficult to achieve this aim and therefore will often have to buy a high quality product at a price that will suffice or buy a lower quality version of the product that is still satisfactory.


Saving

Any household income that isn’t spent over a given period of time. This can be used to reduce debts or placed with financial institutions to create wealth for use at a future date.

Saving function

An equation that explains the relative influence of different factors on the savings of households.

Savings Bank

A financial institution that offers savings facilities to retail customers such as Lloyds TSB. These can also be called Thrifts or Savings and Loans institutions (S&L's).


Scarce resources

A resource which is fixed in supply and will eventually run out if it is used continuously.

Seasonal unemployment

When workers become unemployed due to a seasonal dip or reduction in production at a certain period of the year.

Below is a diagram to show the effects of this type of unemployment on the economy. The SRAS curve shifts inwards as temporarily workers become unavailable after periods of the year e.g. students have to return to education in September and therefore can only work full-time in the summer months. But this is only temporary and soon this effect gets reversed as workers make themselves available for the next seasonal time of the year e.g. Christmas time. So, in the long-run is there no change to the equilibrium as these effects roughly offset each other.


Second Degree Price Discrimination

Is when a firm decides to charge a different price for different quantities, such as quantity discounts for bulk purchases. For example a retailer that purchases a large quantity of goods from a supplier will often receive a large discount for buying in bulk to encourage the retailer to purchase more.

 


Secondary Market

A market where investors can purchase/sell securities or assets from/to other investors, rather than from issuing from companies themselves.

 


Secondary product

Goods that are manufactured from primary products.

Secured

When property deeds are assigned to the mortgagor until all interest payments and principal (amount loaned) have been repaid.

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