Economics Vocabulary Flashcards

Front 1

economics

Back 1

the study of how things are made, bought, sold, and used.

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goods

Back 2

anything that can be manufactured or grown

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services

Back 3

something done for others in exchange for money

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resources

Back 4

anything used to produce a good or a service

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consumers

Back 5

people who buy or use a good/service.

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supply

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amount of a good or a service available to consumers

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demand

Back 7

the amount of a good or service that consumers are willing to buy

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capital

Back 8

money needed to produce goods and services

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division of labor

Back 9

when each worker does one type of job

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gross income

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total amount of money made

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net income

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amount of money left after expenses (profit)

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entrepreneur

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a person who starts a new business (risk taker)

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opportunity cost

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what you give up when you make one choice over another (trade off)

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marketing

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includes advertising, shipping, storing, and selling of goods

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wholesale

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buying large quantities of goods at a lower price

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retail

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buying individual items at higher prices

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traditional economy

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an economy in which people supply the goods they need by methods passed down from ancestors

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free market economy

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privately-owned prodution, supply and demand, competition, and profit motive. (Adam Smith)

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centrally-planned (command) economy

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government controls production/distribution; no competition, not run for profit (Ex: comunist) (Karl Marx)

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mixed economy

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where individuals and government are partners; most means of production are privately-owned but government can guide and regulate economy

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capitalism

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people put money (capital) into businesses and hope for a profit

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recession

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a slowdown of economic activity

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depression

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a severe recession

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Gross Domestic Product

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total value (in dollars) of all goods and services produced in the U.S. each year

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standard of living

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quality of life based on amount of goods/services one can purchase plus amount of leisure time

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inflation

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general rise in prices of most goods and services

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deficit

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when the government spends more money than it makes

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national debt

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the total amount the government owes on money it has borrowed

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Federal Reserve System (the Fed)

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the central bank of the United States; twelve federal reserve districts, each with one F.R. bank; supplies banks with new money, supervises member banks, provides check-clearing services, and affects interest rates

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profit

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the income that remains after a business has paid off its expenses, taxes, and other costs

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stockholder (shareholder)

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a person who buys shares of ownership in a corporation

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dividend

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a share of the profit paid to the stockholders of a corporation

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capital goods

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the buildings and machines needed to make goods and to provide services

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sole proprietorship

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a business owned by one person

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partnership

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a business owned by two or more people

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corporation

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a large business that has many owners

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credit union

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a non-profit "bank" that offers savings accounts and provides loans to qualified members