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31 Cards in this Set
- Front
- Back
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GDP |
Gross Domestic Product; the value of all final goods and services produced in a given year. |
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Nominal GDP |
The components of consumption, investment, government spending, and net exports added together. |
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Final Goods |
Final product, ready to sell. |
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Intermediate Goods |
Goods used to produce the final product. |
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Consumption |
Consumer spending on final goods and services, such as food, education, computers, gasoline, and medical expenses. |
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Investment |
Business spending on capital goods-tools, equipment, and buildings. |
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Government Spending |
Spending by all levels of government on goods and services. |
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Net Exports |
The number of imports subtracted from the number of exports. |
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Monetary Policy |
Managing the money supply to influence interest rates and the availability of credit. |
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Fiscal Policy |
The federal government's overall approach to spending, borrowing, and taxation. |
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Monopoly |
A single business that controls a market and the prices in that market. |
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Trust |
A group or companies organized to benefit from the high prices they all agree to change. |
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Tennessee Valley Authority |
Created to help stabilize the Business Cycle in the economy, developed during the Great Depression. |
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Progressive Tax |
Tax depends on income; higher earners pay higher percentage. |
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Regressive Tax |
Tax depends on income; lower earners pay higher percentage. |
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Proportional Tax |
A tax is the same rate for everyone. |
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Indirect Tax |
Added into the price of a product. |
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Inflation |
The increase of general prices over time. Average rate: 2-3%. |
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Market Basket |
Goods and services most people buy most months. |
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Employment |
Full and part time workers and company workers who received pay during the month. |
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Housing |
Number of housing units on which some construction was performed during the month. |
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Retail |
Amount of products sold by retail and food stores in a month. |
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Purchasing Power |
The amount of "stuff" that can be purchased with a dollar. |
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Business Cycle |
The periodic, but irregular up-and-down movement in economic activity over several periods of time. |
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Contraction |
Slow economic activity, recession. |
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Economic Depression |
Higher unemployment, lower production. |
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Expansion |
Rapid growth, increase wealth. |
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Six Functions of Government |
1. Maintain legal and social framework. 2. Maintain competition. 3. Providing public goods and services. 4. Redistributing income. 5. Correcting for externalities. 6. Stabilizing the economy. |
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Liberals |
Question the market's ability to solve essential social and economic problems. They want more government involvement in the economy. |
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Conservatives |
Believe that the government's role is limited. They want limited government involvement in the economy. |
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Why did the Government get involved? |
-Businesses earning profits unfairly. -Unsafe work conditions. -Unsafe products. -Economic instability. |
