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25 Cards in this Set
- Front
- Back
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balance of payments
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the difference between the money flowing into a country and the money flowing out of a country
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real GDP
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gross domestic product adjusted for inflation
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command economy
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an economic system where a central authroity makes the major decisions
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stagflation
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a period of rising prices (inflation) combined with increases in unemployment (recession)
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the prime interest rate
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the interest rate banks offer thier most preferred customers
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disposable income
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income available to consumers after taxes are deducted
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opportunity cost
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the value in time, money, and resources given up in making a choice
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supply side economics (trickle down economics)
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the theory that government can encourage economic growth by helping businesses
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economic model
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a table, graph, or equations that are used to help understand economic behavior
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equilibrium price
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the price where the quantity supplied equals the quantity demanded
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laffer curve
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a model showing that lower tax rates will stimulate more tax revenue collected
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adam smtih's invisible hand theory
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a theory that states each person acting for there own well being will serve the interests of society as a whole
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global economy
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the national economies of nations merged into a larger world economy
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socialism
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an economic system where the resources need to reproduce goods and services are owned by the government
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a government subsidy
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a government payment to encourage or protect a certain economic activity
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interest vs interest income
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interest is the price for borrowed money; interest income is what is earned by one who loans money
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national debt
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the total amount of money the federal government borrows, the annual deficits combined
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aggregate supply
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the total value of goods and services that all firms produce in a specified period of time
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asset
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an item of value such as money, stock, and land
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elasticity of demand/supply
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how sensitive changes in the quantitity demanded are to changes in rpcies
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investment spending
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business decisions to spend on capital goods to promote economic growth
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a bond
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a loan of money
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tariff
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a tax placed on imported products
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protectionist trade policy
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a foreign trade policy that protects domestic producers with tariffs or quotas
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trade deficit
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trade where spending on imports exceeds money made from selling exports
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