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48 Cards in this Set
- Front
- Back
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Able to produce more of a product than another country.
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Absolute Advantage
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Able to produce a product at a relatively lower opportunity cost than another country.
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Comparative Advantage
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Tracks inflation using retail prices.
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Consumer Price Index
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Spending more than is collected.
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Deficit Spending
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Broad social programs to provide minimum income & health levels.
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Entitlements
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Total amount borrowed to finance deficit spending.
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Federal debt
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Allows countries to specialize in products which they have a comparative advantage for.
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Free Trade
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Written by John Maynard Keynes.
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General Theory
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Describes short-run economics in 4 sectors.
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General Theory
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$ amount of all final goods & services produced within a country's borders in a year.
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GDP
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$ value of all final goods & services produced by U.S.-owned factors of production in a year.
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GNP
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A rise in the general level of prices.
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Inflation
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Statistical series taht measures changes in price over time.
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Price Index
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Tracks wholesale prices of 3000 commodities.
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Producer Price Index
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Limits the number of products that can be imported.
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Quota
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A tax on imports.
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Tariff
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Payments for which the govt. receives neither goods nor services in return.
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Transfer payments
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Measures the severity of job shortages.
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Unemployment Rate
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Scottish economist & philosopher who argued more goods = more wealth.
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Adam Smith
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Wrote "Wealth of Nations."
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Adam Smith
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Output needed to sell to cover total costs.
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Break-even Point
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Use of goods/services to impress others (fancy cars, expensive jewelry).
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Conspicuous consumption
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Intended for final use by the consumer.
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Consumer goods
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Formal agreement to fix prices or otherwise behave in an operative manner.
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Collusion
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Total production increases, marginal product decreases.
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Diminishing Returns
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Will last 3+ years under normal use.
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Durable goods
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Study of human efforts to satisfy unlimited wants & needs.
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Economics
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A few large sellers dominate the market & have ability to influence price in entire market.
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Oligopoly
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Putting $ to work to earn a profit.
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Investment
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Anything that can be exchanged for goods/services.
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Medium of exhange
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Market w/ one seller. (Very few exist)
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Monopoly
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When prices are stable and supply = demand.
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Market Equilibrium
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Pools investors' money to reduce risk.
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Mutual fund
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External COST to a 3rd party of an economic activity.
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Negative Externalities
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The cost of the next best alternative when another choice is made.
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Opportunity cost
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Minimum legal price.
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Price Floor
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Maximum legal price.
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Price Ceiling
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Foregoing present spending to have $ for future use.
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Savings
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When Q demanded > Q supplied.
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Shortage
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When Q demanded < Q supplied.
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Surplus
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Not having enough resources to produce all the things people want.
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Scarcity
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Can be used in place of another good.
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Substitute Goods
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Govt. payment to business/individuals to encourage a certain type of economic activity.
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Subsidies
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Alternatives (if you can't have everything you want, you must prioritize & make choices).
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Trade-offs
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The capacity to be useful to someone, it varies from person to person.
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Utility
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Cost that changes w/ level of production.
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Variable cost
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Accounts whose funds could be removed by simply writing a check w/o prior approval from the depository institution.
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Demand Deposits (DDA)
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Quarterly returns on stockholders in the form of a check.
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Dividends
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