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controlled market (D4, L5)<br />A market regulated by a central or local government. There can be control over pricing, over the quantities which can be sold or in the range of people allowed to buy and selL Many European countries in the past gave the police the power to regulate markets; today the principal organizations regulating prices have been set up under national price or agricultural policies. In practice, it is difficult to have complete control over a market as the prices set are unlikely to be permanently in equilibrium, thus giving buyers and sellers an incentive to evade the controls.<br /><em>See also:</em> black market; prices policy
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marginal propensity to import (F1)<br />The change in the value of imports brought about by income increasing by one unit. If all extra income is spent on imports, the marginal propensity to import (MPM) is 1; if only 10 per cent is spent on imports, the MPM is 0.1. Calculation of the MPM is essential to a measurement of the FOREIGN TRADE MULTI• PL!ER.
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specialization (D2, LO)<br />1 Subdivision Or DIVISION OF LABOUR.<br /> 2 A reduction in the number of economic activities of a country with a view to reducing costs and maximizing output. One of the major examples of specialization is in international t rade, first justified by the doctrine of absolute advantage and subsequently by CDMPARATIVE advantage. Advocates of specialization always point out the general increase of real incomes which results from factors of production being employed in their best uses.
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