Here are Economics Terms beginning with M

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Macroeconomics is the study of aggregate economic activity such as the economic growth rate, levels of employment and unemployment, the rate of inflation and the balance of payments. It also looks at the policy instruments that influence aggregate economic activity such as fiscal, monetary and exchange rate policies.

Managed exchange rate an exchange rate policy whereby the authorities intervene on occasion in an attempt to influence the exchange rate in their desired direction or to combat excessive volatility.

Marginal benefit is the addition to total benefit of an increase in one unit of of something. When applied to consumption of a Good, the marginal benefit is the addition to total utility that an individual receives from consuming an additional unit of  the good.

Marginal consumer surplus the marginal utility from consuming a good less the price paid for the extra unit.

Marginal cost of production the additional to total cost from producing one more unit of a good.

Marginal efficiency of capital the discount rate that when applied to an investment project that makes the net present value of the investment project equal to zero.

Marginal physical product the addition to total product of employing one extra unit of the variable factor of production. Since the variable factor of production in the short run is assumed to be labor, then the marginal physical product of labor is the addition to total product of employing one extra worker.

Marginal productivity theory argues that the demand for factor of production is determined by the marginal revenue product of that factor of production. The marginal revenue product is defined as the marginal physical product of the factor of production times the price of the good.

Marginal propensity to consume the increase in consumer expenditure divided by the increase in the national income. If consumer expenditure increases by $8 million when income increases by $10 million then the marginal propensity to consume is 0.8.

Marginal propensity to import the increase in import expenditure divided by the increase in the national
income. If import expenditure increases by $3 million when income increases by $10 million then the marginal propensity to import is 0.3.

Marginal propensity to save the increase in savings divided by the increase in the national income. If consumer expenditure increases by $2 million when income increases by $10 million then the marginal propensity to save is 0.2.

The marginal rate of factor substitution is the rate at which one factor of production can be substituted by another factor of production while the level of output remains constant. For example,  if the marginal rate of substitution of labour for capital is 2 then in order to keep output constant if one machine is give up then 2 extra units of labor need to be employed to keep output constant.

The marginal rate of income tax is the change in the tax paid over the change in income. For example, if the marginal rate of tax is 0.4 then an increase in income of $100 will mean an extra $40 will be paid in tax.

The marginal rate of substitution in consumption is the amount of one good that a consumer is prepared to give up in order to obatain an extra unit of consumption of anothetr good while keeping total utility constant. For example, if the marginal rate of substitution of Good Y for Good X is 2 then the consumer is prepared to give up 2 units of Good Y for one extra unit of Good X while keeping total utility constant.

Marginal revenue is the addition to total revenue that a firm obtains by selling one extra unit of a good. It is measured as the change in total revenue divided by the change in the number of units sold.

Marginal revenue product of a factor of production is the addition to a firms total revenue that will be obtained by employing an extra unit of that factor of production. For example, if an extra worker is employed and this results in an increase increase output by 10 units and each unit is sold for £50 then the marginal revenue product of labor is £500, that is, marginal revenue product of labor is equal to marginal product of labour times the price of the good.

Market is a physical or virtual environment in which buyers and sellers interact.

Market clearing price the price at which supply and demand are matched.

Market clearing quantity the  quantity at which supply and demand are matched.

Market for loanable funds the supply and demand for loanable funds in the banking and financial system.

Mark-up a profit margin added by firms over their average cost of production to arrive at a price for their product or service. The mark-up can be expressed as an amount per unit or as a percentage of the average cost.

Marshall-Lerner condition states that a depreciation or devaluation of a currency will improve the current account of the balance of payments provided the sum of the price elasticities of demand for imports and exports has an absolute value of greater than one.

Maturity gap is the difference between the average maturity of bank loans and bank deposits. For instance if the average bank loan is 7 years and the average bank deposit is 1.5 years then the maturity gap is 5.5 years.

Maturity transformation describes the process by which banks and financial institutions convert short term deposits into longer term loans.

Maximax is a strategy by which a player picks a strategy that has the possibility of achieving the highest possible outcome, even though that outcome may not actually be achieved.

Maximin is a strategy by which a player picks a strategy that has the possibility of least worst outcome for that player of all alternative strategies should the worst outcome actually happen.

Maximum price is a price ceiling set by a regulatory agency that sets a maximum chargeable price for the product or service.. If the maximum price ceiling is set below the equilibrium price it will result in a shortage of the good.

Mean is the sum of a sample or population of numbers divided by the total number of  of numbers that make up the sample or population.

Means tested benefits are benefits that are paid only provided the recipient's income is below a certain threshold. Or the level of the benefits will be inversely related to the level of the recipients income.

Median the value of the middle number of a series when they are ranked in numerical order. For example, for the series 2, 2, 3, 5, 7,7, 8. 10 the median is 5.

Medium of exchange is a thing such as money which is generally accepted as a means of payment of goods and services.

Menu costs refers to the anticipated cost of inflation whereby a positive inflation rate involves economic resource costs because of the need to devote time and resources to adjusting prices.

Merit goods are goods that have desirable characteristics for society as a whole as well as the individual who consumers them. Since they may be under provided for in a free market economy, then governments may decide to subsidize their provision or produce them for free. Examples include, education and health since both education and health benefit not only the individual who receives them but also society through lower unemployment , less crime and  less risk of the spread of diseases.

M-form (multi-divisional form) is a system of corporate organization whereby a company is split up  into a number of different divisions with each division then split up into a number of Departments. For example a multinational company may be split up into different country divisions, alternatively a company may be split into different divisions based upon different products that the firm produces.

Microeconomics is a branch of economics that looks at how individuals or firms make decisions relating to the consumption and production of goods and services, given that they have limited resources and that choices have to be made.

Minimum reserve ratio a minimum ratio of cash and/or other reserves that is required for a bank to hold in relation to its deposits.

Mixed economy is an economy whereby there is a free market combined with government intervention is various forms.

Mobility of labor is the willingness and ability of labor to move from one job to another, or from one region to another or one country to another.

Monetarists are a school of economists that argue inflation is caused by rises in the money supply above that rate of economic growth.

Monetary base is a narrow definition of the money supply which is notes and coins held the public plus notes and coins held by the banking system as reserves.

Monetary policy is the policy of altering the money supply and short term interest rates in a bid to achieve desired effects on aggregate demand in the economy.

Money illusion occurs when economic agents mistake an increase in their wages as an increase in their real wage. For example, money illusion occurs if  economic agents believe they are better off after receiving a 5% wage rise when inflation is higher say 6%.

Money market refers to the market for short term borrowing and lending where the short term is defined as one year or less. Money market instruments include commercial bills, Treasury bills, short term deposits and loans.

Money multiplier refers to the multiple by which a broad monetary aggregate expands for a given increase in the narrow money supply. So if the broad money supply rises by $40 million when the narrow money supply rises by $10 million then the money multiplier is 4.

Monopolistic competition refers to a market structure where there are many competing firm, no barriers to entry or exit but  each firm produces a differentiated product or service. As such each firm can raise its price without losing all its customers.

Monopoly refers to a market structure in which there is only one firms that supplies the good or service. As such the market demand curve for the product or service is the monopolist's demand curve.

Monopsony refers to a market structure where there is a single buyer of a product or service. It can also refer to a situation in which one firm is the single employer, that is, the sole purchaser of labor services.

Moral hazard refers to a situation where the existence of an insurance policy makes the insured event more likely to occur than if there was no insurance.

Multiplier examines the total impact of an increases in government expenditure or investment expenditure or export expenditure on the national income. For example, if the multiplier is 2 then an increase in government expenditure of $10 million leads to an eventual increase in the national income of $20 million.

Mutual recognition is a concept developed by the European Union which argues that once a product or service has met certain minimum standards then the product or service is free to be sold  in all other European Union countries.

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