Chapter 2 Slideshow Vocab Flashcards
(28 cards)
Economics
The study of how society employs resources to produce goods and services for consumption among various groups of individuals.
Macroeconomics
Concentrates on the operation of a nation’s economy as a whole.
Microeconomics
Concentrates on the behavior of people and organizations in markets for particular products or services.
Resource Development
The study of how to increase resources and create conditions that will make better use of them.
Capitalism
All or most of the land, factories and stores are owned by individuals, not the government, and operated for profit.
State Capitalism
When the state, rather than private owners, run some businesses.
Free market
Decisions about what and how much to produce are made by the market.
Supply
The quantities of products businesses are willing to sell at different prices.
Demand
The quantities of products consumers are willing to buy at different prices.
Market price (equilibrium point)
Determined by supply and demand, this is the negotiated price.
Socialism
An economic system based on the premise that some basic businesses, like utilities, should be owned by the government in order to more evenly distribute profits among the people.
Communism
An economic and political system which the government makes all economic decisions and owns almost all the major factors of production.
Free-Market Economies
The market largely determines what goods and services are produced, who gets them, and how the economy grows.
Command Economies
The government largely determines what goods and services are produced, who gets them, and how the economy will grow.
Mixed Economies
Some allocation of resources is made by the market and some by the government.
Gross Domestic Product
Total value of final goods and services produced in a country in a given year. As long as a company is within a country’s border, their numbers go into the country’s GDP (even if they are foreign-owned).
Gross Output
A measure of total sales volume at all stages of production.
Inflation
The general rise in the prices of goods and services over time.
Disinflation
When the price increases are slowing (inflation rate declining)
Deflation
Prices are declining because too few are chasing too many goods
Stagflation
Economy is slowing, but prices are going up.
Consumer Price Index
Monthly statistics that measure the pace of inflation or deflation.
Business Cycles
Periodic rises and falls that occur in economies over time.
Fiscal Policy
The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending.
