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| Term | Definition |
|---|---|
| Laffer Curve | A graphical representation of the relationship between tax rates and government revenue. It suggests that there is an optimal tax rate beyond which higher rates may lead to a decrease in tax revenue due to reduced economic activity. |
| Laissez-Faire | An economic system advocating minimal government intervention in economic affairs, allowing free markets to operate without significant regulation. |
| Land Value Tax | A tax levied on the unimproved value of land, encouraging efficient land use and discouraging speculation. |
| Law of Demand | A fundamental economic principle stating that the quantity demanded of a good or service decreases as its price increases, and vice versa. |
| Law of Supply | A fundamental economic principle stating that the quantity supplied of a good or service increases as its price increases, and vice versa. |
| Liquidity | The ease with which an asset can be converted into cash without affecting its market price. High liquidity implies quick buy or sell capability. |
| Long Run | In economics, the period during which all inputs can be varied, and the firm can adjust its scale of operations. Contrasts with the short run, where some inputs are fixed. |
| Monetary Policy | The use of central bank tools, such as interest rates and money supply, to control money supply, credit availability, and inflation. |
| Fiscal Policy | The use of government spending and taxation to influence the overall economy, often employed to achieve macroeconomic goals. |
| Liquidity Trap | A situation with very low interest rates, where individuals and businesses prefer hoarding cash over investing or spending. |
| Labor Force | The total number of people employed or actively seeking employment. Includes both employed and unemployed individuals. |
| Lump-Sum Tax | A fixed tax amount independent of the taxpayer’s income. Remains constant regardless of income changes. |
| Lump-Sum Grant | A fixed amount of money provided by the government for a specific purpose, contrasting with tied grants. |
| Leverage | The use of borrowed capital to increase potential return on an investment, amplifying gains but also increasing risks. |
| Labor Productivity | The amount of output produced per unit of labor input, measuring efficiency in production. |
| Long-Term Capital Gain | Profits from the sale of assets held for more than a specified period, often receiving preferential tax treatment. |
| Leisure | Free time not spent on work or obligations, considered a normal good in economics. |
| Learning Curve | A graphical representation showing efficiency improvement over time as individuals or organizations gain experience in a task or activity. |
| Limited Liability | A legal concept protecting personal assets of business owners or shareholders from being used to cover business debts or liabilities. |
| Labour | Wage labor refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labor power. |
| Labour Discipline | Employers’ interest in maximizing employees’ effort and rule adherence in the workplace, often reflecting the cost of job loss and employer power. |
| Labour Economics | Focuses on understanding wage labor markets, where labor is a commodity supplied by laborers in exchange for a wage paid by demanding firms. |
| Labour Extraction | Strategies employers use to extract genuine labor effort from workers, utilizing discipline, supervision, technology, and threat of dismissal. |
| Labour Force | The total working-age population willing and able to work, including employed and actively seeking employment individuals. |
| Labour Intensity | The ratio of labor effort expended to total compensated labor time, reflecting the success of employer labor extraction strategies. |
| Labour Market Segmentation | Systematic differences among various worker groups, leading to different job assignments based on gender, race, ethnicity, or age. |
| Labour Supply | The total number of workers available and willing to work in paid positions, often measured by the labor force. |
| Laissez-Faire | An economic system with minimal government intervention in private transactions. |
| Law of Demand | Economic rule stating that quantity demanded and price move inversely, with an increase in demand leading to a price decrease, and vice versa. |
| Law of Diminishing Marginal Utility | Economic rule stating that the additional satisfaction from purchasing one more unit of a product decreases with each additional unit purchased. |
| Law of Increasing Costs | Economic principle stating that to produce an increasing amount of a good, a supplier must give up greater amounts of another good. |
| Law of Supply | Fundamental economic principle stating that, keeping other factors constant, an increase in price results in an increase in quantity supplied. |
| Lease | A contractual arrangement where the lessee pays the lessor for the use of an asset. |
| Leprechaun Economics | Distortion of national accounts data caused by corporate tax schemes. |
| Liability | Financial responsibility for something. |
| Local Tax | Any tax paid to a city or county, such as sales taxes, school taxes, or property taxes. |
| Long Run | Theoretical concept in economics where all markets are in equilibrium, contrasting with the short run, where some constraints exist. |
| Long Waves | Longer-term periods of economic growth or stagnation, lasting a decade or more, reflecting changes in technology, politics, and international relations. |
| Long-Run Shutdown Condition | A situation where a firm’s total revenues exceed variable costs but are less than total costs, leading to operation until fixed cost contracts expire. |
| Long-Term Financing | Financing for more than one year, including issuing equity shares, debt financing, long-term loans, leases, or bonds. |
| Loose Money Policy | Monetary policy making credit inexpensive and abundant, possibly leading to inflation. |