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15 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Business cycle |
The periodic rises and falls that occur in economies overtime. |
They could be seasonal cycles |
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Capitalism |
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit. |
Example of capitalistic countries are: The United States, Europe, Japan, and Canada. |
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CPI (Consumer price index) |
Monthly statistics the measure the pace of inflation or deflation. |
The government can compute the cost of goods and services, including housing, food, apparel, and medical care, to see whether or not they are going up or down. |
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Fiscal policy |
The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending. |
The first fiscal policy tool is taxation. |
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Free-market economies |
Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows. |
Capitalism is the popular term for this economic system. |
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GDP (Gross domestic product) |
The total value of final goods and services produced in a country in a given year. |
Both domestic and foreign-owned companies can produce the goods and services included in GDP, as long as the companies are located within thecountry’s boundaries. |
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Mixed economies |
Economic systems in which some allocation of resources is made by the market and some of the government. |
If you were two separate a mixed economy, some countries would either have capitalism or socialism.
If free-market mechanisms allocate most resources, the leaders call their system capitalism.
If the government allocates most resources, the leaders call it socialism. |
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Macroeconomics |
The part of economics study that looks at the operation of a nation’s economy as a whole. |
(The whole United States) |
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Microeconomics |
The part of economics study that looks at the behavior of people and organizations in particular markets. |
And example of microeconomics: The question of why do people buy smaller cars when gas prices go up? |
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Market inflation |
The general rise in prices of goods and services overtime. |
The official definition is a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of goods and services. |
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Unemployment rate |
The percentage of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks. |
Four types of unemployment are:
1. Frictional 2. Structural 3. Cyclical 4. Seasonal |
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Oligopoly |
The degree of competition in which just a few sellers dominate the market. |
And example: companies that produce tobacco, gasoline, automobiles, aluminum, and aircraft. |
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Monetary policy |
The management of the money supply and interest rates by the Federal Reserve. |
The Fed’s most visible role is the raising and lowering of interest rates. |
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What are the four phases of long-term business cycles? |
1. Economic boom
2. Recession- Two or more consecutive quarters of decline in the GDP.
3. Depression- A severe recession.
4. Recovery- when the economy stabilizes and starts to grow. This leads to an Economic Boom. |
Periodic rises and falls that occur in economies overtime. |
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What are the four basic rights people have with capitalism? |
1. The rights to own private property.
2. The right to own a business and keep all that business’s profits.
3. The right to freedom of competition.
4. The right to freedom of choice. |
More detail found of the foundations of capitalism on page #35 in chapter 2. |
