Chapter 5 Vocab

Question 1

deposit

Answer 1

a credit to an individual account

Question 2

depreciation

Answer 2

a decline over time in the value of a tangible asset such as a house or car

Question 3

depression

Answer 3

a period of drastic decline in the national economy

Question 4

3 characteristics of a depression

Answer 4

decreasing business activity, falling prices, and unemployment

Question 5

destructive competition

Answer 5

competition that forces some producers out of the market

Question 6

devaluation

Answer 6

a policy undertaken by a nation to reduce the value of its national currency either in relation to gold or in relation to the currencies of other nations

Question 7

law of diminishing returns

Answer 7

the “point of diminishing returns” is a supposed point at which additional effort or investment in a given endeavor will not yield correspondingly increasing results

Question 8

discount

Answer 8

a deduction made from a charge

Question 9

discount rate

Answer 9

charged by the Federal Reserve System on loans it makes to the banking system

Question 10

disposable personal income

Answer 10

the total amount of money available after taxes have been paid

Question 11

distribution

Answer 11

the process of marketing and merchandising goods; the way in which wealth or goods and services are allotted

Question 12

divestiture

Answer 12

the act of a corporation or conglomerate in getting rid of a subsidiary company or division

Question 13

dividend

Answer 13

a payment to the stockholders of a corporation from the corporation’s earnings

Question 14

division of labor

Answer 14

dividing a job into many specialized parts with a single worker or a few workers assigned to each part; car industry and mass production

Question 15

double indemnity

Answer 15

feature of the life insurance policy that says the insurer will pay twice the face value of the policy if the insured dies accidentally

Question 16

Dow Jones Average

Answer 16

index of the relative price movement of a selected group of major stocks on the New York Stock Exchange

Question 17

down payment

Answer 17

a payment in part made at the item of purchase of a good

Question 18

dummy

Answer 18

one who stands in for a real director or who serves as a nominal director

Question 19

dumping

Answer 19

the sale of goods of one nation in the markets of a second nation at less than the price charged within the first nation

Question 20

durable goods

Answer 20

products capable of long utility; long life

Question 21

duty

Answer 21

a tax charged by a government especially an import