Ch7 Iss225

Front 1

automatic stabilizers

Back 1

government programs that act to counter economic cycles

Front 2

capital market

Back 2

decisions of lenders and borrowers to make and accept loans at specified interest rates (prices)

Front 3

comparative advantage

Back 3

the argument that countries benefit most when they concentrate on producing the goods that they are most efficient at producing

Front 4

constant dollars

Back 4

dollars valued from a particular year in order to account for changes in the value of dollars; that is, inflation

Front 5

consumer demand

Back 5

preferences for goods and services, expressed by willingness to pay

Front 6

corporate raiders

Back 6

investors who arrange to purchase stock in a hostile takeover effort

Front 7

Council of Economic Advisers

Back 7

advises the president on national economic policies

Front 8

economic decision making

Back 8

markets: individually, through voluntary exchange governments: collectively,through coercion

Front 9

economic system

Back 9

institutions and processes by which society produces and distributes scarce resources

Front 10

economics

Back 10

the study of the production and distribution of scarce resources

Front 11

Employment Act of 1946

Back 11

pledges the federal government to promote maximum employment, production, and purchasing power

Front 12

federal deficits

Back 12

the annual negative imbalances that occur when the government spends more than it collects

Front 13

Federal Reserve Board

Back 13

organization that controls the supply of money and credit and interest rates (sets monetary policy)

Front 14

fiscal policy

Back 14

effects of government taxing, spending, and deficits on the economy

Front 15

GDP (gross domestic product)

Back 15

total value of nation’s production of goods and services for a year

Front 16

General Agreement on Tariffs and Trade (GATT)

Back 16

a multinational agreement covering trade relations among nations

Front 17

hostile takeover

Back 17

the purchase of stock in a corporation by an outsider and the subsequent ousting of the prior management

Front 18

inflation

Back 18

increases in the general level of prices, not just prices of some products

Front 19

labor market

Back 19

decisions of employers and employees to offer and accept jobs at specified wages (prices)

Front 20

managerialism

Back 20

control of the corporation by professional managers rather than stockholders

Front 21

marginal tax rates

Back 21

tax rates applied to additional income

Front 22

market

Back 22

arrangement that enables people to exchange money for goods, services, and labor

Front 23

monetary policy

Back 23

government’s influence over the supply of money and credit and interest rates

Front 24

national debt

Back 24

the accumulated debt of the U.S. government of over $6 trillion owed to purchasers of U.S. bonds

Front 25

national income accounting

Back 25

data collected by government that describes the nation’s income and output

Front 26

North American Free Trade Agreement (NAFTA)

Back 26

an agreement in which the United States, Mexico, and Canada collaborated to eliminate all barriers to trade

Front 27

per capita GDP

Back 27

gross domestic product divided by the population; a measure of economic well-being

Front 28

prices

Back 28

allocate goods and services by willingness and ability to pay determined by consumer demand, product supply, and competition

Front 29

principal-agent problem

Back 29

tendency for managers (agents) to operate firms to their own benefit rather than that of the owners (principals)

Front 30

private enterprise economy

Back 30

made up of private individuals in search of wages and profits, acting on their own, without government direction

Front 31

profits

Back 31

monetary gains that motivate producers to satisfy consumer demand and to produce goods and services in the most efficient way possible

Front 32

protectionism

Back 32

maintaining high tariffs in order to protect domestic producers rom foreign competition

Front 33

supply-side economics

Back 33

government policies designed to increase the supply of goods and services through incentives to work, save, and produce

Front 34

tariffs

Back 34

taxes on goods imported into a country

Front 35

trade deficit

Back 35

the imbalance that results when a country imports more goods than it exports

Front 36

underground economy

Back 36

economic activities that are unreported and not counted in GDP

Front 37

unemployment rate

Back 37

the percentage of the labor force not working but looking for work or waiting for a job to open

Front 38

World Trade Organization (WTO)

Back 38

an international organization that adjudicates trade disputes among countries and monitors and enforces trade agreements