Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

105 Cards in this Set

  • Front
  • Back
1 ability-to-pay principle of taxation
belief that taxes should be paid according to level of income regardless of benefits received
2 absolute advantage
country's ability to produce more of a given product than can another country
3 accelerated depreciation
schedule that spreads depreciation over fewer years than normal to generate larger tax reductions
4 accelerator
change in investment spending cuased by a change in overall spending
5 acid rain
pollution in form of rainwater mixed with sulfur dioxide, a mild form of sulfuric acid
6 agency shop
arrangement under which non-union members must pay union dues
7 aggregate demand
the total quantity of goods and services demanded at different price levels
8 aggregate demand curve
hypothetical curve showing different levels of real GDP that could be purchased at various price levels
9 aggregate supply
the total value of goods and services that all firms would produce in a specific period of time at various price levels
10 aggregate supply curve
hypothetical curve showing different levels of real GDP that could be produced at various price levels
11 alternative minimum tax
personal income tax rate that applies to cases where taxes would otherwise fall below a certain level
12 appropriations bill
legislation earmarking funds for certain purposes
13 aquifer
underground water-bearing rock formation
14 arbitration
agreement by two parties to place a dispute before a third party for a binding settlement
group of ten Southeast Asian nations working to promote regional cooperation, economic growth, and trade
16 assets
properties, possessions and claims on others; usually listed as entries on a balance sheet
17 automatic stabilizer
program that automatically provides benefits to offset a change in people's incomes; unemployment insurance, entitlement programs
18 automation
production with mechanical or other processes that reduces the need for workers
19 average tax rate
total taxes paid divided by the total taxable income
20 baby boom
historically high birthrate years in the U.S. from 1946-1964
21 balance of payments
difference between money paid to, and received from, other nations in trade; balance on current account includes goods and services, merchandise trade balance counts only goods
22 balance sheet
condensed statement showing assets, liabilities, and net worth of an economic unit
23 balanced budget
annual budget in which expenditures equal revenues
24 balanced budget amendment
constitutional amendment requiring government to spend no more than it collects in taxes and other revenues, excluding borrowing
25 bank holiday
brief period during which all banks or depository institutions are closed to prevent bank runs
26 bankruptcy
court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time
27 barter economy
moneyless economy that relies on trade or barter
28 base year
year serving as point of comparison for other years in a price index or other statistical measure
29 bear market
period during which stock market prices move down for several months or years in a row
30 benefit principle of taxation
belief that taxes should be paid according to benefits received regardless of income
31 Better Business Bureau
business-sponsored nonprofit organization providing information on local companies to consumers
32 bill consolidation loan
popular type of consumer loan used to pay off multiple existing loans
33 black market
market in which economic products are sold illegally
34 bond
formal contract to repay borrowed money and interest on the borrowed money at regular future intervals
35 boycott
protest in the form of a refusal to buy, including atempts to convince others to join
36 break-even point
production needed if the firm is to recover its costs; production level where total cost equals total revenue
37 bull market
period during which stock market prices move up for several months of years in a row
38 business cycle
systematic changes in real GDP marked by alternating periods of expansion and contraction
39 business fluctuation
changes in real GDP marked by alternating periods of expansion and contraction that occur on a less than systematic basis
40 call option
contract giving investors the option to buy commodities, equities, or financial assets at a specific future date using a price agreed upon today
41 capital
tools, equipment, and factories used in the production of goods and services; one of four factors of production
42 capital flight
legal or illegal export of a nation's currency and foreign exchange
43 capital gains
profits from the sale of an asset held for 12 months
44 capital good
tool, equipment, or other manufactured good used to produce other goods and services; a factor of production
45 capital-intensive
production method requiring relatively large amounts of capital relative to labor
46 capital market
market in which financial capital is loaned and/or borrowed for more than one year
47 capitalism
economic system in which private citizens own and use the factors of production in order to generate profits
48 capital-to-labor ratio
measure obtained by dividing the total capital stock by the labor force
49 cartel
group of sellers or producers acting together to raise prices by restricting availability of a product; OPEC
50 cash flow
total amount of new funds the business generates from operations; broadest measure of profits for a firm, includes both net income and non-cash charges
51 cease and desist order
ruling requiring a company to stop an unfair business practice that reducese or limits competition
52 census
complete count of population, including place of residence
53 center of population
point where the country would balance if it were flat and everyone weighed the same
54 central bank
bank that can lend to other banks in times of need, a "blankers' bank"
55 certificate of deposit
receipt showing that an investor has made an interest-bearing loan to a financial institution
56 chamber of commerce
nonprofit organization of local businesses whose purpose is to promote their interests
57 change in demand
consumers demand different amounts at every price, causing the demand curve to shift to the left or the right
58 change in quantity demanded
movement along the demand curve showing that a different quantity is purchased in response to a change in price
59 change in quantity supplied
change in amount offered for sale in response to a price change; movement along the supply curve
60 change in supply
different amounts offered for sale at each and every possible price in the market; shift of the supply curve
61 charter
written government approval to establish a corporation; includes company name, address, purpose of business, # of shares of stock, and other features of the business
62 civilian labor force
non-institutionalized part of the population, aged 16 and over, either working or looking for a job
63 closed shop
illegal arrangement under which workers must join a union before they are hired
64 coins
metallic forms of money such as pennies, nickels, dimes, and quarters
65 collateral
property or other security used to guarantee repayment of a loan
66 collective bargaining
process of negotiation between union and management representatives over pay, benefits, and job-related matters
67 collective farm
small farms in the former Soviet Union owned by the state, but operated by families who shared in some of the profits
68 collectivization
forced common ownership of factors of production; used in the former Soviet Union in agriculture and manufacturing under Stalin
69 collusion
agreements, usually illegal, among producers to fix prices, limit output, or divide markets
70 command economy
economic system characterized by a central authority that makes most of the major economic decisions
71 commercial bank
depository institution that, until the mid-1970s, had the exclusive right to offer checking accounts
72 commodity money
money that has an alternative use as a commodity; gunpowder, flour, corn
73 communism
economic and political system in which factors of production are collectively owned and directed by the state; theoretically classless society in which everyone works for the common good
74 company union
union organized, supported, and even financed by an employer
75 comparable worth
doctrine stating that equal pay should be given for jobs of comparable difficulty
76 comparative advantage
country's ability to produce a given product relatively more efficiently than another country; production at a lower opportunity cost
77 competition
the struggle among sellers to attract consumers while lowering costs
78 complements
products that increase the value of other products; products related in such a way that an increase in the price of one reduces the demand for both
79 conglomerate
firm with four or more businesses making unrelated products, with no single business responsible for a majority of its sales
80 constant dollars
dollar amounts or prices that have been adjusted for inflation; same as real dollars
81 consumer good
good intended for final use by consumers rather than businesses
82 consumer price index
index used to measure price changes for a market basket of frequently used consumer items
83 consumer sovereignty
role of consumer as ruler of the market when determining the types of goods and services produced
84 cooperative
nonprofit association performing some kind of economic activity for the benefit of its members
85 corporate income tax
tax on corporate profits
86 corporation
form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right ot buy and sell property, enter into legal contracts, sue and be sued
87 cost-benefit analysis
way of thinking that compares the cost of an action to its benefits
88 Countil of Economic Advisers
three-member group that devises strategies and advises the President of the United States on economic matters
89 coupon
stated interest on a corporate, municipal or government bond
90 craft union
labor union whose workers perform the same kind of work; same as trade union
91 credit union
nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services
92 creditor
person or institution to whom money is owed
93 creeping inflation
relatively low rate of inflation, usually 1 to 3 percent annually
94 crowding-out effect
higher than normal interest rates and diminished access to financial capital faced by private investors when government increases its borrowing in financial markets
95 crude birthrate
number of live births per 1000 people
96 currency
paper component of the money supply, today consisting of Federal Reserve notes
97 current dollars
dollar amounts or prices that are not adjusted for inflation
98 current GDP
Gross Domestic Product measured in current prices, unadjusted for inflation
99 current yield
bond's annual coupon interest divided by purchase price; measure of a bond's return
100 customs duty
tax on imported products
101 customs union
group of countries that have agreed to reduce trade barriers
102 cyclical unemployment
unemployment directly related to swings in the business cycle
103 default
the act of not repaying borrowed money
104 deficiency payment
cash payment making up the difference between the market price and the target price of an agricultural crop
105 deficit spending
annual government spending in excess of taxes and other revenues