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38 Cards in this Set

  • Front
  • Back
What is capital
any man made product that is used to create other goods ans services
What are needs
Some like food,air or shelter that are necessary for survival
What are wants
an item that we desire but that is not necessary for survival
what is an incentive
a prize or gift that helps people to do something positive for something
What is scarity
limited resoureces to meet
unlimited wants
supply and demand
when the cost of the activity are raised or the benefits have been reduced people do less of the activity
out source
external enterprise in a country other than the country where the customer is located 85% is dominated by Indian
Budget Deficit
excess of budget any over revenues
over revenues, usually financed by
budget supply(surplus)
budgetary revenues over
Factors of production
natural human and capital resources
required to produce a good
or service
What is Labor
physical and mental efforts people
use to create goods
What is a Natural Resource
a resource that comes from the earth
What is Productivity
the out put of goods and services
production policy graph
shows alternative ways to use an economy's resources
production policy frontier
line on a production possibilities graph that shows maxium possiblities
of output for specific economy
Why unequal distribution of income
it does not take into account taxes, noncash subsides, health care or food stamps
Causes of Poverty
lack of education, location, racial and gender discrimination, economic shifts, shifts in family structure
poverty by race, age, region
whites 11%, blacks 26.5%, hispanic 27.1%
under 18 19.9%, over 65 10.5%
2 parent 5.2%, female household 31.6%
people take time to find a job
people might change jobs, might not find the right job after they finish school
industries slow down for the season
construction, migrant workers, some students who need just summer jobs
workers skills do not match the jobs available
when the recessions ends or business cycle resumes there would be upward movement of rehiring
measuring unemployment
percentage of the nation's
labor force that is unemployed
Calculating unemployment
number of people unemployed divided by the number of people in civilian labor force divided by 100
Full unemployment
is level of unemployment reached when no cyclical unemployment exists
working at a job in which you are over qualified
inflation that is out of control
inflation goes as high as 100 to 500 % per month
effects of inflation
purchasing power- dollar will not buy the same number of goods that it did in the years past
fixed income- does not increase even when prices do
interest rates- theamount you gain in interest is lost in when inflation rises
recent trends
in the late 1990's inflation went to low
now moving higher
con sumers price index
uses prices of a group of consumer goods calleed market basket
CPI Market Basket
representative of goods and services
Creeping Inflation
steady and predictable
Chronic Inflation
accelerating inflation is much harder on the economy

business cannot anticipate what their cost will be
Grosse Domestic Product
GDP-dollar value of all final goods and services
what is not counted inGPD
intermediate goods- which are used is the production of the final good
Gross National Product
market value of goods and services produced by Americans in one years
Supply, Demand,and Prices

Law of Demand
when a good's price is lower, consumers will buy it
Substitution Effect
when the price of one good rises like pizza, people will buy tacos which are cheaper