No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Appendix A Definition Index 479 Gross domestic product (GDP): the monetary value of all final goods and services produced domestically within a given time period. (Chapter 14—Application in Public Choice: The National Debt) H Heterogeneous capital: Capital is usually very specific to its intended use, and it is not equally applied elsewhere (i.e., it is not homogenous). (Chapter 12—Bubble, Bubble, Toil and Trouble!) High powered money: currency and reserves provided to the banking system by the Federal Reserve (also known as the Monetary Base). This is often called high-powered since these reserves can be multiplied to create broader money that circulates in the economy. (Chapter 11—Fractional Reserve Banking Explained) Higher order goods: goods that are used to produce consumption goods. Numerically, the higher the order of a good, the further it is removed from actual consumption. (Chapter 7—Structure of Production: Stages of Capital) I Implementation costs: the cost of doing whatever the government tells you to do. (Chapter 14—Size of Government) Income: the flow of monetary payments (wages, interest, rents, etc.) received over a period of time. (Chapter 3—A Deeper Dive into Concepts for Demand) Income elasticity of demand: measures how responsive the quantity demanded of a good is for a given change in income. More formally, it is equal to percentage of change in quantity demanded divided by the percentage of change in income. (Chapter 3—A Deeper Dive into Concepts for Demand) Inferior good: a good for which demand falls as income falls. (Chapter 3—A Deeper Dive into Concepts for Demand) Inflation: a rise in the general level of prices over time. (Chapter 12—Value of Money) Institutions: humanly devised constraints that structure and guide human interaction. (Chapter 10—Institutions) Interest: Conceptually, interest is an expression of time preference. Numerically, it refers to how much someone will have to be compensated to defer consumption today, expressed as a percentage of the amount borrowed/loaned. (Chapter 12—Loanable Funds Framework)