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25 Cards in this Set

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law of supply
the principle that states that as the price of an item increases, so will the amount of the item producers are willing to suplly and vice versa
law of demand
the principle that as the price of an item increases, a smaller quantity of the item will be purchased and vice versa
money
any object used as a medium of exchange, a store of wealth, and a measure of value
factors of production
the resources needed to produce goods and services such as land, labor, capitol, and the entrepreneur
deficit budget
when the government spends more money than it collects in income for one year
demand schedule
a table that shows how much of a product consumers will demand at varous possible prices
supply schedule
a table that shows how much of a product suppliers will offer at various possible prices
depression
a major decline in business activity that lasts for more than 6 months characterized by high rates of unemployment
capitalism
an economic system characterized by private ownership of resources, profit motive, competition, and market systems
market
any place buyer and seller meet
consumer price index
a stat used to measure changes in the level of prices
economics
the social science that studies how human societies use scarce resources to satisfy unlimited wants
microeconomics
the branch of economics that studies the behavior of individuals and individual firms
macroeconomics
the branch of economics that studies the large economic issues and the economy as a whole
gross domestic product
the dollar value of all finished goods and services produced within the nation's boundaries within one year
gross national product
the dollar value of all finished goods and services produced within the nation's boundaries and the foreign sector within one year
recession
a minor decline in business activity that lasts for less than 6 months
inflation
a period of rising prices
monetary policy
the government's adjusting the money supply and interest rates to influence changes in the economy
fiscal policy
the government's adjusting taxation and government spending to influence changes in the economy
aggregate demand
the total quantity of goods and services demanded
the business cycle
the pattern of growth and decline of real GNP;including four phases, expansion,inflation,recession,depression
capital
items used to produce goods and services such as machinery, money, and tools
leading economic indicator
a statistic that helps economists to measure economic performance
liquidity
the ability of and asset to be changed into cash