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Flashcards in Chapter 2 Terms Deck (21):
1

A table or chart explaining the relationships between pairs of variables

Tabular model (aka schedule)

2

A graph formed by the plotting of data involving two variables and the connecting of the resulting points to form a line of infinite information from the data

Line graph

3

A model that en­ables an economist to see the maximum feasible amounts of two commodities that a business can produce when those items are competing for that business’s limited resources

Production Possibilities Curve (PPC)

4

A model depicting the flow of economic goods and services between households, business firms, the government, and financial markets

Circular flow model

5

The total expenditures made by all households

Consumption expenditures

6

The resources used in producing the nation’s GDP: land, labor, financial capital, and entre­preneurship

Factors of Production

7

The factor of production denoting all the natural resources that go into the production of goods

Land

8

The factor of production denoting all human effort that goes into the creation of goods and services

Labor

9

The tools business firms use to produce goods and services

Capital

10

The factor of production denoting the activity of creatively combining natural resources, human labor, and financial capital in unique ways to develop new and useful products and services

Entrepreneurship

11

The payments business firms make in exchange for the four factors of production

Factor Costs

12

Payment for the use of an owner’s property

Rent

13

Factor costs involving all payments for labor used to produce goods or services

Wages

14

An additional charge that a creditor demands from a borrower to cover the expense of the loan and to provide a profit; the factor cost involving the payments made on borrowed money

Interest

15

Factor costs involving the rewards entrepreneurs receive for successful risk taking

Profit

16

Payments of money or goods from the government to individuals for which no specific economic repayment is expected

Transfer Payments

17

A situation in which a government, business firm, or individual receives less income than is paid out in expenses

Budget Deficit

18

A situation in which a government, business firm, or individual receives more income than is paid out in expenses

Budget Surplus

19

The vast collection of financial in­stitutions that receive deposits of excess funds from households and that lend to business firms
(includes commercial banks, savings and loan associations, credit unions, insurance companies, finance companies, and stockbrokerage firms)

Financial Market

20

The action of withdrawing money from an account or borrowing money

Dissaving

21

A situation in which governmental borrowing reduces the financial capital available to business firms

Crowding out