Chapter 2 Business

Front 1

Maynard Keynes (Keynesian)

Back 1

Who had a great influence and argued/advocated stabilizing the economy by the use of fiscal policy?

Front 2

Business cycle

Back 2

periodic but irregular fluctuations in economic activity

Front 3

Fiscal policy

Back 3

increase or decrease in taxes or government spending in an effort to achieve economic stability

Front 4

monetary policy

Back 4

the regulation of money supply and interest rates by a central bank

Front 5

Socialism

Back 5

Economy in which key industries are government-owned but private ownership of smaller business is allowed

Front 6

Communism

Back 6

Economy with collective ownership of property under a central government

Front 7

Capitalism

Back 7

Economic system based on a free market, profit motive, competition and private ownership of factors of production

Front 8

Deflation

Back 8

a persisten decrease in the level of consumer prices

Front 9

Stagflation

Back 9

Condition of slow economic growth, rising prices and relatively high unemployment

Front 10

Inflation

Back 10

general rise in the prices of goods and services over time

Front 11

Disinflation

Back 11

occurs when price increases are slowing (the inflation rate is declining)

Front 12

Brain Drain

Back 12

migration of educated professionals from a country for better pay or living conditions

Front 13

Invisible hand

Back 13

 Economic principle stating that a freely competitive market works for the benefit of all

Front 14

Oligopoly

Back 14

Market situation in which each of a few producers affect but does not control the market

Front 15

Monopoly

Back 15

market situation with only one seller for a given product or service

Front 16

Recession

Back 16

Two or more consequetive quarters of decline in GDP

Front 17

Demand

Back 17

The amount of a commodity or service that people are ready to buy for a given price

Front 18

Market Price

Back 18

The price determined by the movement of supply and demand

Front 19

Supply

Back 19

The quantity of a product producers are willing to sell at a given price

Front 20

Free Market Economy

Back 20

Economy based on supply and demand with little or no government intervention or control

Front 21

Command Economy

Back 21

Economic system in which the government decides what will be produced and how it will be distributed

Front 22

Economics

Back 22

The study of how societies allocate scarce resources to produce and distribute goods and services

Front 23

Microeconomics

Back 23

The study of economic behavior of individuals, businesses, and industries

Front 24

Unemployment Rate

Back 24

Percentage of total workforce who are unemployed and actively seeking work

Front 25

CPI Consumer Price Index

Back 25

A measure of the average change over time in prices paid by consumers for a fictional basket of goods and services

Front 26

PPI Producer Price Index

Back 26

Weighted index of prices measured at the wholesale (or producer) level

Front 27

GDP Gross Domestic Product

Back 27

The total value of an economy's domestic output of goods and services

Front 28

Macroeconomics

Back 28

The study of economics that looks at the operation of a nation's economy as a whole

Front 29

Mixed Economy

Back 29

exist where some allocation of resources is made by the market and some by the government

Front 30

Capitalism

Back 30

What economic system has led to prosperity of most developed economies?

Front 31

Adam Smith

Back 31

Who was the first economist to describe the process that turns self-directed gain into social and economic benefit for all?

Front 32

By the neogitations between buyers and sellers that takes place in the marketplace

Back 32

In Free Markets, how are prices determined?

Front 33

monopolistic competition

Back 33

the degree of competition in which there are a large number of sellers that provide similar- but not identical- products

Front 34

Greater social equality

Back 34

What is the major benefit of socialism?

Front 35

Mixed economy

Back 35

What is the trend towards economy of most countries today?

Front 36

Free Market

Back 36

What type of economy corresponds to capitalism?

Front 37

command

Back 37

What type of economy corresponds to communism?

Front 38

improve our understanding of the economy

Back 38

The primary role of economic indications is to

Front 39

Federal Reserve Bank

Back 39

Who implements monetary policy?

Front 40

Monetary and Fiscal Policy

Back 40

What are two primary tools thgovernment can use to stablize the economy?

Front 41

 1. Right to own private property

2. Right to own a business and keep all that business's profits

3. Right to freedom of competition

4. Right to freedom of choice

Back 41

What are the four basic rights under a free-market capitalism system?

Front 42

Perfect competition

Back 42

The degree of competition in which there are many sellers in a market ad none is large enough to dictate the price of a product

Front 43

business cycles

Back 43

the periodic rise and falls that occur in economies over time

Front 44

depression

Back 44

a severe recession, usually accompanied by defaltion

Front 45

Fiscal policy

Back 45

The federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending

Front 46

Keynesian economic theory

Back 46

The theory that a government policy of increasing spending and cutting taxes could stimulate the economy in a recession

Front 47

Monetary policy

Back 47

The management of the money supply and interest rates by the Federal Reserve Bank