Ch. 3 vocab Flashcards
(22 cards)
Cash transfers
direct payments of money to poor, disabled, retired people
Business cycle
period of macroeconomic expansion followed by a period of contraction/decline
Work ethic
a commitment to the value of work and purposeful activity
Contract
allows people to decide what agreements they want to enter into
Externalities
an economic side effect of a g & s that generates benefits/costs to someone other than the person deciding how much to produce or consume
Free rider
someone who wouldn’t choose to pay for a certain g & s, but would get the benefits of it anyway if it were provided as a public good
Gross Domestic Product (GDP)
the total value of all final g & s produced in an economy
In-kind benefits
g & s provided for free or at greatly reduced prices
Macroeconomics
the study of the behavior and decision making of entire economies
Microeconomics
the study of the economic behavior and decision making of small units
Negative externality
some decisions to produce g&s generate unintended costs called “ “
Positive externality
beneficial side effects generated from public goods given to many people
Poverty threshold
an income level that which is needed to support families or households
Private property
property owned by individuals or companies
Private sector
part of the economy that involves transactions of individuals and businesses (little incentive to produce public goods)
Profit motive
the force that encourages people and organizations to improve their material well-being
Public disclosure laws
requires companies to give consumers important information about their products
Public good
a shared good for which it would be inefficient or impractical to make consumers pay individually and to exclude nonpayers
Technology
process used to produce a good or service
Welfare
general term that refers to government aid for the poor
Voluntary exchange
allows people to decide what and when they want to buy and sell
3 macroeconomic goals
full employment, growth, and stability
