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21 Cards in this Set
- Front
- Back
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economic model
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is not a tangible thing but rather a simplification of how factors in our environment affect our choices
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tabular model a.k.a schedule
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popular method of explaining simple relationships between pairs of variables
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line graph
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a graph formed by the plotting of data involving two variables and the connecting of the resulting points to form a line of infinite information from the data
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circular flow model
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a model depicting the flow of economic goods and services between households, business firms, government, and financial markets
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consumption expenditures
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the total expenditures made by all households
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factors of production
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the resources used in producing the nation's GNP; they include land, labor, financial capital, and entrepreneurship
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land
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all of the natural resources that go into the production of goods
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labor
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all human effort that goes into the creation of goods and services
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financial capital
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the factor of production denoting all money loaned directly to business firms from the households sector
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real capital
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the tools the business firm uses to produce goods and services
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entrepreneurship
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the activity of creatively combining natural resources, human labor, and financial capital in unique ways to develop new and useful products and services
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rent
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all payments for the use of an owner's property
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wages
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all payments for labor used to produce goods and services; includes salaries, hourly wages, bonuses, and benefits
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interest
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payment business firms make on borrowed money
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profits
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rewards entrepreneurs receive for successful risk taking
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transfer payments
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payments of money or goods to persons for which no specific economic repayment is expected
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budget deficit
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a situation in which a government, business firm, or individual receives less income than is paid out in expenses
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budget surplus
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a situation in which a government, business firm, or individual receives more income than is paid out in expenses
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financial market
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vast collection of financial institutions that receive deposits of excess funds from households and lend to business firms
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dissaving
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money is withdrawn from an account or borrowed
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crowding out
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a situation in which a government borrowing reduces the financial capital available to business firms
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