Basics Flashcards
Factors of production
Element that a nation has at its disposal to deal with the issue of scarcity
Scarcity
Not having enough resources to satisfy every need or want
Trade off
Giving up 1 thing in order to have something else
Absolute advantage
Exist when a country can produce a good or service at a lower cost than other countries
Comparative advantage
A situation in which a country specializes in the production of a good or service at which it is relatively more efficient
Consumer price index
Change in the overall cost of a variety of consumer goods and services
Capitalism
Private ownership of resources by individuals, rather than government
Unemployment rate
Labor free force
Business cycle
Movement of economy from 1 condition to another
National debt
Total amount owed by federal government
Exchange rate
Value of currency in 1 country compared with another
Traditional economy
Goods and services alone from history
Market economy
Private ownership of resources by individuals
Command economy
Government owns and controls resources
Mixed economy
Combine all elements
