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155 Cards in this Set

  • Front
  • Back
factors of production
land, labor, capital, and management
physical capital
money, buildings and equiptment
a limited # available-- everybody gets a certain #
the economic questions
What is to be produced?
How is it to be prodcued?
Who is going to get it?
How much is to be made?
the outcome or expectation that encourages people to behave in a certain manner
free enterprise
private ownership
a concentration of productive efforts on a limited activity - specific job tasks
standard of living
a level of economic prosperity
gross domestic product (gdp)
value of goods and services produced IN the US
elasticity of demand
change in price compared to change in quantity of goods wanted
total cost
fixed cost + variable cost
elasticity of supply
change in price compared to change in quantity of goods offered
intersection of supply and demand - gives an equilibrium price and quantity
quantity supllied exceeds quantity demanded or also called excess supply
to remove laws that effect businesses
economies of scale
those factors that cause a producer's average cost to fall as output increases
imperfect competition
a market structure that lacks one or more of the conditions of perfect competition
two or more companies join together
a market dominated by a single producer
monopolistic competition
a market structure with many companies selling similar but not identical products
business organization involving 2+ people
limited liability
only liable to the amount of your original investment
business organization owned and operated by those who benefit from it
a separate legal business entity created by law - sometimes called artificial person
limited life
doesn't live long (partnerships)
sole proprietorship
single-owner business
umlimited liability
all partners are personally liable
collective bargaining
the worker and employer agree to negotiate any issues (salary, benefits, etc)
labor union
organization of workers who try to improve salary, working conditions, and job security
the value of output
trading good for good, good for service, service for good, or service for service
cheap money (greenbacks)
paper money
coin and paper money
hard money
medium of exchange
used to determine the value of goods or services
anything that serves as a medium of exchange, a unit of value or a store of value
store of value
to identify value for the future
unit of value
used to compare the value of goods and services
institution for receiving, keeping and lending money
discount rate
interest charged for the member banks to borrow from the Fed
insures bank deposits up to $100,000 in case of bank failures. put in by Roosevelt
federal reserve system
1913; establishes a bank for the US and a bank for the other member banks
gold standard
financial system backed by a value of gold
prime rate
interest charged to best customers by member banks
checking accounts (demand deposits)
second level of liquidity
person who is owed money to
how fast you can get money into cash
mortgage (principal + interest)
borrowing money for land, property, buildings or houses
near money (credit cards)
5th level of liquidity
savings account
3rd level of liquidity
time deposit (certificate of deposits)
4th level of liquidity
process of directing resources that will create benefits in the future
collection of your financial assets
corporate bond
bond issued by a corporation usually for growth and development
money market
investing in shoret term gov securities called treasury bills or treasury notes - usually last less than a year
municipal bond
issued by government unit (school, city, etc)
savings bond
issued by gov; pre-discounted and then matures to full value in a few years
capital gain/capital loss
profit or loss on an investment
dow jones (the dow)
financial news service of stock quotation
quotation system for OTC stocks
otc market
over the counter, unlisted stocks
ownership in a corporation
stock exchange
NYSE and AMEX are examples
aggregate supply/demand
total value of goods and services offered/wanted at all prices
gross national product (gnp)
total value of goods and services produced by American companies (including in foreign nations)
nominal gdp
also called current gdp - computing gdp in current dollar value
real gdp
adjusting gdp for inflation
total collapse of the economy
leading indicators
housing permits, early warnings
a decline or slowdown in the economy
decline in GDP and increase in inflation and prices - a stagnant economy
real gdp per capita
adjusted gdp divided by the population
income not used for consumption
cyclical unemployment
people are laid off because of a slowdown in the economy
frictional unemployment
between jobs
full employment/unemployment rate
unemployment rate is 5% or less=full employment
seasonal unemployment
between jobs because of harvesting seasons
structural unemployment
not having the job skills to work
consumer price index
a specific price index comparing a group of products from the past to present
cost-push inflation
increased production will push prices upward
declining spiral or prices and wages
demand-pull inflation
more demand than supply available, prices will be pulled upward
inflation/inflation rate
rising spiral of wages and prices - try to keep under 10%
price index
measurement to show prices of goods and services over a period of time
income distribution
how the income is distributed across the society
poverty level
corporate income tax
tax on a corporation's income
individual income tax
a tax on a person's individual income
progressive tax
a tax that the more you make, the more you pay
property tax
tax on land and buildings
proportional tax
everybody pays the same % regardless of income
regressive tax
the more you make, the less you pay by %
sales tax
a tax on goods and services
a required payment by the government
estate tax
a tax on a deceased person's assets
a medical assistance program for those over 65
social security (FICA)
a retirement pension program by the government
tax on an imported good
tax return
documents you file to pay taxes
method used to collect taxes out of your paycheck
discretionary spending
spending by the gov where they have a choice
mandatory spending
required spending by the government
medical aid program for the eldery and poor
balanced budget
personal property
personal items
real property
land and buildings
tax assessor
government official who decides the value of your propoerty for tax purposes
appropriations bill
bill that allows money to be spent by Congress
federal budget
spends the money and receives money
fiscal policy
gov policy on spending and income
executive office agency that prepares the budget
automatic stabilizer
gov. programs that stabilize the economy
demand-side economics (keynesian)
a theory that gov spending and tax cuts increase demand
multiplier effect
economic concept that by spending $, it multiplies itself into the economy
supply-side economics
gov theory that tax cuts alone will raise consumer supply
budget surplus
take in more than you spend
crowding-out effect
procedure by the gov. securities to slow down money supply
national debt
the money the US has borrowed from itself
treasury (bill, bond, note)
all examples of gov. securities; slow down money supply
budget deficit
spend more than you take in
board of governors
policy of federal reserve
federal open market committee (FOMC)
decides interest rates
federal reserve districts
12 of these
monetary policy
the gov. policy toward money supply
serving banks function
bank for member banks
serving government function
bank for US gov
open market operations
gov. buying and selling securities
required reserve ratio
how much a bank must hold of your deposit
reserve requirements
the ratio of what they have to keep & lend
easy money policy
the money supply is open, interest rates down, gov. buying back bonds
tight money policy
gov. sells securities and interest rates go up
absolute advantage
one country can produce goods and services better than any other
comparative advantage
one country can offer a better price based on opportunity cost
what is shipped out
what is shippied in
currency of the European Union
trade without restriction, tariffs or quotas
import quota
limiting the # of units of a product that can come into the country
North Atlantic Free Trade Agreement - no trade restrictions between Canada, US, Mexico
protecting American products against unfair foreign competition
World Trade Organization (WTO)
removes trade and tariff restrictions
one money has gained/declined in value to another
balance of trade
relationship of a country's imports to their exports
exchange rate
value of one country's currency to another's
foreign exchange market
marketplace for buying and selling currency
trade deficit/surplus
importing more than exporting, or exporting more than importing
infrastructure, life expectancy, literacy rate, mortality rate
areas of development
population growth
% of growth
subsistence agriculture
produce enough food for only your people
resource distribution
how resources/assistance is being shared
international monetary fund
IMF - stabilize exchange rates of money
united nations development program
UNDP - works toward the elimination of poverty
world bank
largest provider of assistance around the world
changing a gov-owned business into a privately-owned one
special economic zones
In China - zones that allow investment in some, no investment in others