Council for Economic Education Glossary

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V

Value Added
The difference between the value of output and the value of the intermediate goods used in the production of that output.

Value of Money
The ability of money to buy goods and services. A wide variety of items has been used as money. Money need not have any intrinsic value. It is people's willingness to accept it that gives it value.

Variable Costs (VC)
Costs of production that change as a firm's output level changes.

Variable Expenses
Expenditures that change from week to week or month to month--for food, clothing, recreation and entertainment, for example.

Variable Income
Income that varies from week to week or month to month.

Velocity of Money
The average number of times each dollar is spent on final goods and services in a year.

Vertical Merger
A combination formed when two businesses, one of which supplies an ingredient of the other's product, merge.

Voluntary Exchange
Trading goods and services with other people because both parties expect to benefit from the trade.

Voluntary Trade
Trading goods and services with other people because both parties expect to benefit from the trade.