Council for Economic Education Glossary

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Take-Home Pay
The amount of money a person receives within a pay period after taxes and other deductions are taken out of his or her paycheck.

A tax on an imported good or service.

Tax Incidence
A measure of who actually pays a tax.

Tax Loophole
An omission or ambiguity in the tax law that allows some people to legally avoid paying certain taxes.

Compulsory payments to governments by households and businesses.

Technological Changes
Improvements in a firm's ability to produce due to improved processes, methods and machines.

Three Cs of Credit
Three characteristics that determine a person's qualifications for obtaining a loan: Capital: Assets owned. Character: A person's past history in repaying debts. Capacity: A person's current and future earnings relative to current debt.

Total Available Credit
In a credit arrangement, the total credit line minus the new balance.

Total Cost (TC)
All costs associated with producing a good or service; the sum of total fixed costs plus total variable costs.

Total Credit Line
In a credit arrangement, the maximum amount that can be charged on the credit account.

Total Revenue (TR)
All money received from selling a good or service; the price times the quantity sold of each item.

The exchange of goods and services for money or other goods and services.

Trade Barriers
Restrictions that prevent free trade among nations. Examples include tariffs, import and export quotas, and nontariff restrictions such as licensing requirements and bureaucratic red tape.

The giving up of one benefit or advantage in order to gain another regarded as more favorable.

Traditional Economy
An economy in which customs and habits from the past are used to resolve most economic issues of production and distribution.

Tragedy of the Commons
Overuse or misuse of a commonly-owned resource, such as public grazing land or fishing waters.

Transaction Costs
Costs associated with buying or selling goods and services that are not included in the money prices of those goods and services. Examples include obtaining information on prices and product quality, searching for sellers, and bargaining costs.

Transfer Payments
Money collected by the government from one group and given to others. Examples include Social Security benefits, unemployment insurance payments and agricultural subsidies.

Transition Economy
An economy that is moving from one economic system to another. The term usually refers to the movement from a planned economic system into a competitive market system.

Truth in Lending Act
A federal law that requires creditors to disclose finance charges and interest rates in a standard, uniform manner.