question

ability-to-pay principle

answer

the idea that people who are best able to afford to pay taxes should pay more than others

question

absolute advantage

answer

a situation whereby one nation can produce a good or service at a lower cost than another nation

question

acceleration principle / accelerator

answer

the idea that small changes in consumption lead to proportionately greater changes in investment

question

administrative red tape

answer

bureaucrats' efforts to slow down the government's approval process

question

ad valorem tariff

answer

a tax on imports calculated as a percentage of their value

question

advertising

answer

paid announcements (ads) that call attention to one's products or services in hopes of attracting customers

question

affirmative action

answer

the active hiring and promotion of members of certain groups because of past patterns of discrimination

question

after-tax income

answer

the income that remains after paying taxes

question

agency shop

answer

a workplace where nonunion workers are required to pay dues to the union that represents them

question

aggregate demand

answer

the total of all spending by all sectors of the nation's economy: consumers, businesses, and government

question

allocate

answer

to assign parts of a whole

question

annual percentage rate (APR)

answer

the percentage cost of credit on a purchase, figured on a yearly basis

question

annual report

answer

a report by a company on its financial operations over the past year

question

annuity

answer

a fund purchased for a fixed sum in order to provide periodic income at a later time

question

antitrust law

answer

legislation that limits monopolistic practices

question

arbitration

answer

the process of settling a labor-management dispute by which an impartial third party renders a binding decision

question

arbitrator

answer

the third part in arbitration

question

arithmetic progression

answer

a sequence of numbers in which each number is increased by the same amount (e.g. 1,2,3,4, etc.)

question

assessment

answer

the official determination of the value of a property

question

asset

answer

anything of value that is owned by an individual or a business

question

automated teller machine (ATM)

answer

a bank device that allows a customer to make deposits and withdrawals

question

automatic stabilizer

answer

a feature built into an economic system that automatically compensates for changes in the business cycle

question

automation

answer

the substitution of modern machinery for human labor in the production process

question

average unit costs

answer

total production costs divided by the total output

question

balanced budget

answer

one in which planned income and expenses are equal

question

balanced fund

answer

a mutual fund that invests in both stocks and bonds

question

balance of payments

answer

a financial statement that summarizes a nation's economic transactions with the rest of the world

question

balance of trade

answer

the difference between the cost of a nation's merchandise imports and the value of its merchandise exports

question

balance sheet

answer

a financial report that summarizes the assets, liabilities, and net worth of an individual or organization

question

bank card

answer

a plastic card used to facilitate electronic funds transfers (includes credit cards, debit cards, and ATM cards)

question

bank reserves

answer

the funds a bank sets aside to meet withdrawal demands

question

bankruptcy

answer

a legal declaration that a firm is unable to pay its debts

question

barter

answer

the exchange of a good or service for another good or service

question

bear

answer

an investor who acts in expectation that the price of a stock will decline

question

beneficial externality

answer

a side effect of an economic activity that provides a source of enjoyment for the public

question

beneficiary

answer

an individual named in an insurance policy who is to receive benefits

question

benefits-received principle

answer

the idea that taxes should be paid by those who will benefit from the money collected

question

bilateral

answer

having to do with two nations

question

bimetallic monetary standard

answer

a money system based on the ability to exchange currency for two metals, usually gold and silver

question

blank endorsement

answer

a check endorsement that transfers title to anyone holding the check

question

block grant

answer

federal aid to a state or local government to achieve broad policy goals

question

blue-collar worker

answer

one employed in craft, operative, or manual labor

question

board of directors

answer

the elected representatives of the stockholders of a corporation

question

bond

answer

a certificate issued by a unit of government or a corporation in exchange for a long-term loan

question

bond fund

answer

a mutual fund that invests only in bonds

question

bourgeoisie

answer

people of the middle class

question

boycott

answer

an organized refusal to buy goods or services from a company

question

brand name

answer

an adopted name given by a producer or seller to a good or service to distinguish it as produced or sold by that producer or seller

question

Bretton Woods system

answer

a worldwide money system based on the U.S. government promise to exchange dollars presented by foreign countries for gold at the rate of $35 an ounce

question

broker

answer

one who carries out customers' orders to buy and sell securities

question

budget

answer

a plan for dealing with future income and expenses

question

bull

answer

an investor who believes that the price of a stock will rise

question

bull market

answer

a general rise in prices of stocks

question

business cycle

answer

the fluctuations in a nation's economic activity

question

buying long

answer

purchasing securities in the expectation of selling them later at a higher price

question

by-product

answer

a secondary good produced along with a major item of production

question

capacity

answer

maximum output in the short run

question

capital

answer

machines, tools, buildings, and other things used to produce services and goods; money

question

capital account

answer

the summary of capital movements in a balance of payments

question

capital consumption

answer

the sums that all businesses set aside in a year to replace worn-out plant and equipment; also called depreciation

question

capital formation

answer

the production of capital goods

question

capital gain

answer

the profit realized from the sale of an asset

question

capital goods

answer

goods used to produce other goods

question

capital growth

answer

the increase in value of a stock over time

question

capitalism

answer

an economic system in which most of the resources of production are privately owned, and most economic decisions are made by individuals and business firms

question

capital movement

answer

an investment, loan, or gift from one country to another to settle differences between a country's imports and its exports

question

capital resource

answer

(capital) machines, tools, buildings, and other things used to produce services and goods; money

question

career

answer

an individual's lifelong work

question

cartel

answer

a group of sellers who formally agree among themselves to restrict output so as to control prices of their products

question

cash flow

answer

the movement of cash into and out of a business. > positive cash flow = cash inflow exceeds the outflow > negative cash flow = cash outflow exceeds inflow

question

cash in vault

answer

money that a bank has on hand to use

question

cash value

answer

the amount of money an individual will receive if an insurance policy is redeemed before its due date

question

caveat emptor

answer

"let the buyer beware"

question

selling price

answer

a maximum, government-set price for something

question

central bank

answer

a national institution that supervises other banks in a country; sometimes called a national bank

question

certificate of deposit (CD)

answer

a savings instrument in which a buyer agrees not to withdraw his or her deposit for a set period of time

question

certify

answer

to approve something officially

question

ceteris paribus

answer

the assumption that all things other than what is being considered will stay the same

question

charge account

answer

an arrangement that allows account holders to purchase goods on credit

question

charter

answer

a government license for people to form a corporation

question

check

answer

a written order directing a depository institution to pay a sum of money

question

checkable deposits

answer

balances in bank accounts that offer check-writing privileges

question

checkbook money

answer

that portion of the money supply represented by checkable deposits

question

checkoff

answer

a clause in some union contracts that requires the employer to withhold union dues from workers' paychecks

question

circular flow

answer

the movement of money, goods, and services through the economy

question

clearing a check

answer

the process whereby a bank deducts the amount of a check from the account of the person who wrote it

question

climate

answer

the pattern of the weather in a place over a long time (...welcome to science class)

question

closed shop

answer

a business in which only workers belonging to a specified union may be hired

question

coincident indicator

answer

a set of data whose up and down movements parallel the business cycle

question

collaboration

answer

active cooperation

question

collateral

answer

any item of value that a lender may seize should a borrower default on a loan

question

collective bargaining

answer

a series of discussions between representatives of a union and representatives of management to arrive at a contract that will spell out the terms of employment

question

collision insurance

answer

financial protection from damage in an accident caused to a motor vehicle of an insured person

question

collusion

answer

a secret agreement or agreements among competing firms, usually to limit competition

question

command economy

answer

one in which decisions to allocate resources are made by the government

question

commercial bank

answer

a privately owned institution that provides a wide array of financial services, especially to business customers

question

commodity inflation

answer

general price increases caused by run-ups in the prices of key goods

question

common stock

answer

a stock that entitles its owners to vote for candidates to the board of directors

question

commune

answer

a community of farmers who work collectively

question

communism

answer

an economic and political system in which all property is publicly owned and the government makes all WHAT, WHO, and HOW decisions

question

comparative advantage

answer

the principle that a nation should specialize in the production of those goods and services in which it is most efficient, and trade its surplus goods and services for the things it needs

question

competition

answer

the rivalry for goods and services among buyers and among sellers

question

compound interest

answer

the interest earned on the principal and on the interest already earned

question

concentration ratio

answer

the percentage of an industry's output that is produced by its four largest firms

question

conditional sales contract

answer

an installment plan contract in which title to goods sold remains with the seller until the final payment is made

question

conglomerate merger

answer

one that combines firms that produce unrelated products

question

constant dollar

answer

a value of the dollar that has been adjusted to eliminate the effects of inflation or deflation

question

consumer

answer

one who buys goods and services for personal use

question

consumer cooperative

answer

a retail business owned by some or all of its customers

question

Consumer Price Index (CPI)

answer

a series of index numbers measuring changes in the level of prices over a period of time

question

consumer sovereignty

answer

the freedom consumers have to choose which goods and services to buy

question

consumption

answer

the act of buying final goods or services

question

contraction

answer

the phase of a business cycle during which economic activity is in decline

question

cooperative

answer

an association of individuals who wish to buy, market, or produce products as a group

question

coordination

answer

the way in which an economic system answers the WHAT, HOW, and WHO questions

question

copyright

answer

a government grant of legal control over literary, musical, and artistic works

question

corporate income tax

answer

one on net profits of incorporation businesses

question

corporate officer

answer

one of the top managers of a corporation, usually appointed by its board of directors

question

corporation

answer

a business chartered under state or federal law and owned by its stockholders

question

cost-benefit analysis

answer

a weighing of the costs and benefits of something to reach a numerical answer

question

cost-push inflation

answer

a rise in the level of prices caused by an increase in the cost of doing business

question

countercyclical fiscal policy

answer

one calculated to check excessive developments in a business cycle

question

counterfeit

answer

to produce something illegally

question

craft

answer

a skilled occupation

question

craft union

answer

an organization of members of the same skilled trade

question

creative destruction

answer

the economic theory that says that in order for a firm to remain competitive, it must be prepared to modify, revise, and/or abandon existing processes and products in favor of new ones

question

credit card

answer

a piece of plastic that allows holders to purchase goods and services on credit at participating businesses

question

credit history

answer

a record of how one has paid bills and repaid loans

question

credit union

answer

a depository institution whose members are its depositors and borrowers

question

currency

answer

that part of the money supply consisting of paper money and coins

question

current account

answer

the summary of all imports and exports of goods, services, income, and unilateral transfers in a balance of payments

question

current dollars

answer

dollar values or prices that have not been adjusted for inflation or deflation

question

cyclical unemployment

answer

the status of servers who have lost their job because of insufficient demand for goods and services during the downswing of a business cycle

question

debit card

answer

a plastic card that may be used in the same way as a check to purchase goods and services, which are immediately charged to the purchaser's checking or savings account

question

debtor

answer

one who owes money

question

deductible

answer

the initial portion of a year's worth of medical bills, not paid by the insurance company

question

deficit

answer

the status of a budget in which revenue is less than expenditures

question

deficit financing

answer

the policy of balancing a government budget with loans

question

deflation

answer

a general decline in prices

question

demand

answer

the quantity of a product or service that would be purchased at each price

question

demand curve

answer

a line on a graph that shows the amount of a product or services that will be purchased at each price

question

demand deposit

answer

an account in a bank that promises to pay on demand a specified amount of money

question

demand-pull inflation

answer

a rise in the level of prices caused by an increase in demand

question

democratic socialism

answer

an economic system with a command economy, elected government, and freedoms for the population and the press

question

deposit insurance

answer

federal guarantees of deposits of up to $100,000 in banks and thrift institutions

question

deposit multiplier

answer

the number of times deposits could be increased by the banking system for every dollar in reserves

question

depository institution

answer

a bank or thrift institution that holds funds or securities deposited by others

question

depreciation

answer

a decline in the value of capital assets caused by use, the passage of time, or both

question

depression

answer

a serious, long-lasting decline in a nation's business activity

question

deregulate

answer

to remove regulations

question

derived demand

answer

the demand for something that is caused by the demand for something else

question

devaluation

answer

a reduction in the price of one currency in terms of the currencies of other nations

question

developed country

answer

an industrialized country with relatively high GDP and income per capita

question

developing country

answer

one with a largely agricultural economy and relatively low income and GDP per capita

question

diminishing returns

answer

the point at which the extra output, resulting from the addition of more units of a productive4 factor, will begin to decline

question

direct deposit

answer

the transfer of funds, such as wages and tax refunds, by others directly into an individual's checking or savings account

question

direct payment

answer

the payment of bills electronically after customers authorize firms to deduct money from the customers' checking or savings accounts

question

direct tax

answer

a tax paid to a government by the person or business that is taxed; a tax that cannot be shifted

question

disability insurance

answer

financial protection from loss of income because of an extended illness or disability

question

discount rate

answer

the interest on loans that the Federal Reserve charges its member banks

question

discretionary fiscal policy

answer

a fiscal policy that the government may or may not use to regulate the economy

question

diseconomy of scale

answer

an increase in the cost of doing business that results when a business has grown too large

question

disposable income

answer

the income a person or family has left after paying personal taxes

question

dividends

answer

profits that are distributed by corporations to shareholders

question

division of labor

answer

the dividing of a production process into a series of jobs, thereby enabling workers to increase output through specialization

question

draft

answer

a written order, such as a check, in which one party directs a second

question

drawee

answer

the bhank upon which a check is drawn

question

drawer

answer

the person writing a check

question

durable good

answer

a product that is expected to last several years

question

earned income tax credit

answer

a reduction in federal taxes for individuals and families who meet certain income and other guidelines

question

easy-money policy

answer

a Fed policy to expand the money supply

question

econometrics

answer

a branch of economics that uses mathematics and statistics in solving economic problems

question

economic efficiency

answer

a measure of how well a society uses its available resources to produce goods and services

question

economic growth

answer

the increase in output of goods and services over time; an increase over time in either real GDP or real GDP per capita

question

economic indicator

answer

a set of statistics about the performance of a sector of the nation's economy; often classified as either coincident, leading, or lagging

question

economic model

answer

a simplified representation (verbal, graphic, or mathematical) of an economic problem

question

economics

answer

the study of how people and societies use limited resources to satisfy unlimited wants

question

economic stability

answer

a period of modest changes in the level of prices, employment, and business activity

question

economic system

answer

the way in which a society answers the WHAT, HOW, and WHO questions

question

economy of scale

answer

a reduction in the cost of doing business that results from increases in the size of operations

question

educational attainment

answer

the number of years of school completed or degrees obtained

question

elastic currency

answer

one that expands and contracts with the needs of businesses

question

elasticity of demand

answer

the extent to which total spending for an item with fluctuate with changes in prices

question

elasticity of supply

answer

the extent to which the total spending for an item will fluctuate with changes in supply

question

electronic funds transfer (EFT)

answer

the transfer of funds electronically

question

embargo

answer

a ban on importing goods

question

embezzlement

answer

the stealing of funds from a firm, union, or other organization by an insider

question

eminent domain

answer

the right of government to acquire private property for public use by paying a reasonable price to the owner

question

endorsement

answer

the act of passing title to a check to another party

question

energy consumption per capita

answer

a nation's total energy consumption divided by its population

question

energy efficiency

answer

the relative amount of energy used to run an appliance or vehicle

question

EnergyGuide label

answer

one that provides an estimate of the yearly cost of operating an appliance and how that appliance compares in energy usage with competing products

question

energy tax

answer

a tax on the consumption of energy

question

Engel's Law

answer

the rule that as a family's income increases, the percentage spent on food decreases, while the percentage spent on luxuries, medical care, personal care, and savings increases

question

entitlements

answer

programs that automatically provide benefits to specified classes of individuals

question

entrepreneur

answer

a person who gathers together the factors of production to create and operate a business enterprise in the hope of earning profits

question

entrepreneurship

answer

the process of bringing together the factors of production

question

equation of exchange

answer

MV = PQ, where M = money supply, V = velocity, P = average price paid, and Q = quantity of goods and services produced

question

equilibrium price

answer

the price at which the quantity of a good or services supplied equals the amount demanded

question

equity financing

answer

a corporation's method of obtaining capital by selling its stock

question

equity fund

answer

a mutual fund that invests only in corporate stocks

question

escalator clause

answer

a section of a union contract that ties wage increases to a cost-of-living index

question

estate planning

answer

the sum of all actions one takes to accumulate wealth to leave to one's heirs and to determine how to divide the estate among the heirs

question

estate tax

answer

a tax levied on a person's money or property at the time of death

question

euro

answer

the common currency of a number of European Union countries

question

excess reserves

answer

the funds held by a bank that are above the reserve requirement

question

exchange rate

answer

the amount of one currency that can be purchased for a certain amount of another currency

question

excise tax

answer

a tax on the manufacture, sale, or use of a good or service

question

exemption

answer

a deduction from earnings that are subject to income tax (given to individuals and their dependents)

question

expansion

answer

the phase of a business cycle during which the economy advances out of a trough

question

expenditure's approach

answer

a way of calculating GDP by measuring purchases by consumers, businesses, and government

question

exports

answer

a nation's goods and services that are sold abroad

question

external causes

answer

events outside the economy that cause changes in the business cycle

question

external cost

answer

a business expense paid for by a society as a whole

question

external debt

answer

money that the federal government owes to foreign institutions and individuals

question

externality

answer

an economic activity that is paid for or enjoyed by those who had neither produced nor consumed it

question

face value

answer

the dollar value of a security or insurance policy as printed on its face

question

fact-finding board

answer

one that investigates issues in a labor dispute and makes a report

question

factor of production

answer

a resource (such as labor, land or capital) that is used to produce a good or service

question

family planning

answer

efforts to limit the size of families

question

final goods

answer

products sold at retail

question

finance charge

answer

the total amount one pays to use credit in a purchase

question

financial assistance

answer

cash payments by a government to individuals in need

question

financial plan

answer

a statement of one's goals that will cost money and the means of achieving those goals

question

financial resources

answer

money or assets that can be converted into money

question

fire insurance

answer

financial protection for the insured for damages caused by a fire to a home or other buildings and to furnishings

question

fiscal policy

answer

the use by the government of its powers to tax and spend in order to regulate the economy

question

fiscal year

answer

an accounting period of 12 months

question

five-year plan

answer

a detailed statement of a nation's production goals (and means of attaining them) for a five-year period

question

fixed costs

answer

those that remain unchanged regardless of the number of units a business produces

question

flat tax

answer

a tax with a single rate that is applied to all income above a certain level

question

floating exchange rate

answer

the value of a nation's currency that moves up and down to reflect roughly the laws of supply and demand

question

fluctuate

answer

to move up and down in value

question

401(k) plan

answer

a fund run by an employer into which a worker (and sometimes the employer) contributes to provide income upon retirement

question

fractional currency

answer

U.S. coins that are worth less than $1

question

fractional reserve banking

answer

a system in which only a fraction of the total deposits managed by each bank must be kept in reserve

question

frictional unemployment

answer

the status of workers who have left one job and are likely soon to find another

question

fringe benefit

answer

the compensation received by employees in addition to wages

question

full employment

answer

the condition in which all of an economy's resources are being utilized

question

full endorsement

answer

a check endorsement that transfers title of the check to a specific party

question

GDP per capita

answer

total value of all gods and services produced by a national economy in a year divided by the population

question

geometric progression

answer

a sequence of numbers in which the ratio of one number to its predecessor is always the same

question

gift tax

answer

a federal tax on gifts in excess of specified limits

question

glasnost

answer

a Soviet policy introduced by Mikhail Gorbachv that encouraged public discussion and criticism

question

global economy

answer

the combined economies of all nations

question

globalization

answer

the reduction of barriers to the movement of goods and services, workers, and capital among nations

question

global warming

answer

the idea that the Earth's surface temperatures are increasing over time

question

goldsmith

answer

a person who makes and sells articles of gold for a living

question

gold standard

answer

the tying of the value of a nation's currency to a fixed amount of gold

question

good

answer

a tangible item of value

question

goods-producing industry

answer

one that primarily makes goods`

question

goodwill

answer

the value of a firm's intangible assets, such as its reputation or location

question

grant-in-aid

answer

a payment by one level of government to a lower one, usually designated to be spent for a specific purpose

question

Great Depression

answer

the severe economic downturn in the United States and elsewhere, 1929-1939

question

greenhouse effect

answer

the trapping of the sun's heat by atmospheric gases

question

Gresham's Law

answer

the idea that cheap money drives out expensive money

question

grievance

answer

a formal complaint by a union member against his or her employer

question

grievance machinery

answer

established methods of resolving complaints filed by union members against their employer.

question

gross domestic product (GDP)

answer

the total value of all goods and services produced by a national economy in one year

question

gross expenses

answer

total of all expenses other than selling costs

question

gross income

answer

total sales minus selling cost

question

gross pay

answer

one's paycheck before any payroll deductions are mad

question

gross private domestic investment

answer

the sum of business spending for new equipment, construction, and changes in business inventories

question

gross receipts tax

answer

one levied on a business firm's retail and wholesale sales

question

harmful externality

answer

a side effect of an economic activity, one that imposes costs on the public.

question

hidden tax

answer

one included in the selling price of a good or service without the buyer knowing it

question

holding company

answer

a corporation that has controlling interest in the shares of one or more other corporations

question

home equity loan

answer

a consumer loan in which one's home is used as collateral

question

home mortgage

answer

a pledge of one's home as security for a loan to buy the home

question

homeowner's insurance

answer

protection to cover costs of various types of potential risks to the owner of a home

question

horizontal merger

answer

a merger of two or more firms that produce competing products

question

hospital insurance

answer

that part of health insurance that will pay all or part of the costs incurred in a hospital stay (other than surgical and doctor's fees)

question

human resources

answer

the people whose efforts and skills go into the production of goods and services

question

identity theft

answer

the assumption by criminals of the identity of a person for the purpose of gaining access to that person's financial accounts or obtaining credit in the name of that person

question

imperfect competition

answer

market classification falling between monopoly and perfect competition and consisting of monopolistic competition and oligopoly

question

import

answer

a good and service that is purchased from abroad

question

import restriction

answer

the imposition of a tariff, quota, or outright ban on foreign products as a means of protecting the domestic producers of those products

question

income approach

answer

a way of calculating GDP by measuring the total income of all employees and businesses

question

income security

answer

government welfare

question

incomes policy

answer

government efforts to control inflation by limiting increases in wages and prices

question

income statement

answer

a summary of the financial activities of a firm over a period of time

question

income tax

answer

a tax on a person's or company's income after certain items have been deducted

question

index number

answer

one showing percentage change of a variable from a base year

question

indirect tax

answer

a tax that can be shifted from the person or business taxed to someone else, who is frequently unaware of that fact

question

individual income tax

answer

one on the earnings of individuals and unincorporated businesses

question

individual retirement account (IRA)

answer

a fund into which an individual may pay a limited amount each year to provide income upon retirement

question

industrial production index

answer

a measure of changes in output in the nation's factories, mines, and utilities

question

Industrial Revolution

answer

a period of rapid mechanization of a nation's industry

question

inelastic demand

answer

a market situation in which a decrease in price results in a less than proportionate increase in the quantity demanded, and vice versa

question

infant industry

answer

an industry that is newly developed

question

infant mortality rate

answer

the number of babies (out of every 1,000 live births) who die before their first birthday

question

inflation

answer

a general rise in prices

question

inflationary gap

answer

the excess of aggregate demand over total output at full employment

question

infrastructure

answer

the physical capital that supports a society's activities (roads, power lines, water facilities, schools, etc)

question

inheritance tax

answer

a tax levied on the property of a person who has died

question

injunction

answer

a court order to cease a certain activity

question

innovation

answer

a new way of doing something

question

installment plan

answer

a method of purchasing something on credit with payments scheduled over time

question

insurance

answer

a way of protecting oneself and others against money losses by sharing the risks with others

question

interest rate

answer

the price paid to borrow money

question

interlocking directorate

answer

a situation in which the same people sit on the boards of directors of competing firms

question

internal causes

answer

events within the economy that trigger changes in the business cycle

question

internal cost

answer

a business expense paid for by the firm incurring it

question

internal debt

answer

money that the federal government owes to U.S. institutions and individuals

question

Internet banking

answer

a system that allows individuals and firms to use the Internet to perform banking activities

question

inventory

answer

the goods that a business has on hand to sell and the materials used in their manufacture

question

inverse

answer

the reverse of

question

investing

answer

the use of savings to buy something that is expected to increase in value

question

investment

answer

that which people or institutions purchase while investing

question

investment bank

answer

an institution that underwrites corporations' issuing of stocks and bonds

question

investment-grade bond

answer

a bond ranked Baa or BBB and above

question

investor

answer

one who buys something of value for income and/or long-term growth

question

job outlook

answer

the chances of finding work in a particular occupation, region, or season

question

job security

answer

union-management agreements that make it difficult to dismiss workers without good cause

question

junk bond

answer

a highly risky bond ranked below investment grade

question

jurisdictional strike

answer

one caused by a dispute between two unions over which one can represent certain workers

question

keiretsu

answer

a closely knit network of business firms in Japan.... (guaranteed you'll have to define this one, *and* spell it correctly, just FYI)

question

labor

answer

the factor of production involving human effort

question

labor contract

answer

a written agreement between an employer and a union

question

labor force

answer

the number of people 16 years of age, or older, who are working or looking for work

question

line of credit

answer

a bank's arrangement with a firm that allows the firm to borrow whenever it needs money, up to a stated limit

question

liquidate

answer

to sell off the assets of a firm and go out of business

question

liquidity

answer

the ease with which an investment vehicle can be turned into cash

question

literacy rate

answer

the percentage of the adult population who can read and write

question

lockout

answer

the shutting down of a plant by management in hopes of getting its union workers to agree to certain contract proposals

question

long run

answer

a period of time during which any or all of the factors of production could vary

question

long-term financing

answer

loans that need to be repaid after a year or more

question

long-term goal

answer

one that you would expect to take more than a year to achieve

question

luxury

answer

a nonessential good or service that adds comfort and pleasure to life

question

M1

answer

the nation's money supply as measured by the total currency, checkbook money, and traveler's checks in circulation on any given day

question

M2

answer

the nation's money supply as measured by M1 + individual savings accounts, money markets funds, and certain foreign assets

question

M3

answer

the nation's money supply as measured by M2 + business and other large savings accounts

question

macroeconomics

answer

the study of the forces affecting the economy as a whole

question

managed capitalism

answer

a market economy with strong government intervention and cooperation among corporations

question

margin

answer

a down payment required when purchasing securities on credit

question

marginal analysis

answer

(marginalism)

question

marginal cost

answer

the addition to costs resulting from the production of one extra unit

question

marginalism

answer

the evaluation of the usefulness of adding one more of an item to the production of a good or service

question

marginal productivity

answer

the value of the output of the last worker hired by a company

question

marginal propensity to consume (MPC)

answer

the rate at which the public spends as national income goes up

question

marginal propensity to save (MPS)

answer

the rate at which the public saves as national income goes up

question

marginal revenue

answer

the income from the production of one more unit of a product or service

question

marginal utility

answer

the additional usefulness received from each added unit of a product or service

question

market

answer

a place where goods and services are bought and sold

question

market economy

answer

one in which the allocation of resources is determined by the free operation of the forces of supply and demand and market prices

question

market failure

answer

the inability of a market to allocate resources efficiently

question

market power

answer

the ability of buyers and sellers to influence prices

question

market price

answer

the price at which the quantity of a good or services supplied equals the amount demanded

question

market risk

answer

the possibility that the value of an investment will be low when one wants to sell

question

mass production

answer

the making of a product in quantity, usually with machinery

question

maximize

answer

to make the most of

question

maximum employment

answer

a goal whereby everyone who wants to work has a job

question

maximum production

answer

the level at which entrepreneurs believe it no longer profitable to add more workers, land, or capital to the production process

question

maximum purchasing power

answer

consumers' ability to buy the greatest amount possible with limited numbers of dollars

question

median retirement age

answer

the age of retirement at which half of all new retirees are older and half are younger

question

mediation

answer

a nonbinding process in which an impartial party, or mediator, tries to bring both sides in a labor dispute into agreement

question

medical insurance

answer

protection from the costs of hospitalization, surgery, medicines, and general medical care

question

medium of exchange

answer

something readily accepted in payment for goods or services

question

mercantilism

answer

a set of economic practices of the 16th and 18th centuries based on the premise that a nation's wealth could be measured by its holdings of gold and silver

question

merger

answer

the absorption of one or more firms by another

question

merit pay

answer

a system of compensation based on the idea that those who perform better are paid more

question

microeconomics

answer

the study of the effects of the economic forces on individual parts of the economy

question

mint

answer

to manufacture coins; a place where coins are made

question

monetary policies

answer

the actions taken by the Federal Reserve System to regulate the nation's supply of money and credit

question

monetary standard

answer

the commodity or benchmark that a society chooses to use for its money

question

money market fund

answer

a mutual fund that invests in short-term credit instruments such as Treasury bills

question

monopolistic competition

answer

a market situation in which there are many firms selling similar items on the basis of product differentiation

question

monopoly

answer

a market situation in which there is only one seller of a particular good or service

question

monopoly power

answer

the ability of a group of firms to act as if it were a monopoly

question

monopsony

answer

a market that has only one buyer

question

more developed country (MDC)

answer

an industrialized country with relatively high GDP and income per capita

question

mortgage

answer

a pledge of property as security for a loan

question

most-favored-nation clause

answer

a treaty provision requiring a signatory to extend the same preferential trade terms to other signatories that it extends to a non-signatory

question

motor vehicle insurance

answer

financial protection to help pay the costs of damages and injuries incurred as a result of a motor vehicle accident

question

multilateral

answer

having to do with many nations

question

multinational corporation

answer

a firm that has operations in two or more countries

question

multiplier

answer

a numerical factor by which an increase in investment or spending is multiplied to find the effect on national income

question

mutual fund

answer

a corporation that uses the proceeds from the sale of its stocks to purchase the securities of other corporations

question

mutual savings bank

answer

a bank that is owned by its depositors

question

national debt

answer

the total of all money owed by the federal government

question

national income

answer

the total of incomes earned by individuals and business firms in the production of the GDP

question

nationalize

answer

to take control by the government of private industries

question

national union

answer

a labor group organized on a national level

question

natural resource

answer

a factor of production obtained from the land, seas or air

question

necessity

answer

a product or service needed to sustain daily life

question

net exports

answer

the difference between a country's imports and exports of goods and services in a year

question

net income

answer

gross income minus expenses (aka net profit)

question

net interest

answer

the difference between the total interest received and that paid out by all businesses in a year

question

net worth

answer

the value of a business as measured by its assets minus its liabilities

question

no-fault insurance

answer

financial protection whereby the injured party in a motor vehicle accident is paid by her or his insurance company, regardless of who was responsible for the accident

question

nominal interest rate

answer

the rate of return on a loan expressed in today's dollars

question

nondurable good

answer

a product that is quickly consumed or wore out

question

nonrenewable resource

answer

one incapable of being replaced or renewed

question

not-for-profit-corporation

answer

one organized to provide a social, educational, or other nonbusiness service, rather than to earn a profit

question

NOW (negotiable order of withdrawal) account

answer

a checking account that pays interest on deposited money

question

offshore tax shelter

answer

a strategy for avoiding certain US taxes by opening an office in foreign countries where the taxes are lower

question

oligopoly

answer

a market dominated by only a few sellers

question

on-the-job training

answer

a program whereby workers earn money while they are learning a skill

question

open market operations

answer

the buying and selling of government bonds by the FOMC

question

open shop

answer

a workplace in which the employer is free to hire either union or nonunion workers

question

opportunity cost

answer

the amount of goods and services that must be done without in order to obtain another good or service

question

outlay

answer

an expenditure

question

output

answer

the total value of goods or services produced by a firm

question

outsource

answer

the have certain tasks done by employees of another firm, sometimes in another country

question

over-the-counter market

answer

places where stocks are bought and sold other than the stock exchanges

question

paradox of thrift

answer

the assertion that if individuals increase the level of their savings, society as a whole will have less to save

question

parity

answer

a price that gives farmers the same purchasing power from the sale of their goods that they enjoyed during certain base years

question

partnership

answer

an unincorporated business owned by two or more people

question

patent

answer

a government grant giving ownership rights to an invention

question

payee

answer

the person to whom a check is payable

question

payroll tax

answer

one levied on a business firm's payroll

question

peak

answer

the upper turning point of a business cycle

question

perestroika

answer

attempts at restructuring the Soviet economy under Mikhail Gorbachev to allow elements of free enterprise

question

perfect competition

answer

a market in which there are many buyers and sellers, none of whom alone can affect prices

question

personal consumption expenditures

answer

spending by consumers

question

personal income

answer

the total income received by all individuals before they pay income taxes

question

personal property tax

answer

a tax on one's property other than real estate

question

Phillips Curve

answer

a graph illustrating the trade-off between inflation and unemployment

question

picketing

answer

the marching of workers with signs outside a place of business, usually to proclaim a strike

question

pollution haven effect

answer

the result of having industrial firms in countries with strong environmental laws relocate to countries with lax environmental rules/enforcement

question

pool

answer

an agreement among two or more firms to share the market for their products and to fix prices

question

pork / pork-barrel legislation

answer

laws passed mainly to benefit people and businesses in an electoral district so that voters will reelect the legislators who supported the laws

question

preferred stock

answer

the shares of stock that are entitled to a fixed dividend before profits are distributed to holders of common stock

question

price-earnings ratio

answer

the current market price of a security divided by its earnings per share

question

price floor

answer

the minimum, government-set price for a commodity

question

price leadership

answer

a characteristic of an oligopoly by which firms match each other's price increases and decreases

question

price makers

answer

firms that can affect the price of goods they sell by increasing or decreasing output

question

price rigidity

answer

a situation of having prices that are slow to adjust to changes in supply and/or demand

question

price supports

answer

a government program that sets a floor on the selling price of some products by offering to buy the products at that floor

question

price takers

answer

firms whose level of production will not affect the price of the goods they sell

question

principal

answer

the face value of a loan

question

private good / service

answer

one consumed by the person or family that pays for it

question

privatization

answer

the transformation of a publicly owned business into a privately owned one

question

weapons of mass destruction (WMD)

answer

nuclear, biological, and chemical ones

question

white-collar worker

answer

one employed in a clerical, professional, or managerial occupation

question

will

answer

a legal document that specifies how one's assets are to be distributed upon one's death

question

worker mobility

answer

the willingness of workers to move to where jobs are

question

yield

answer

the rate of return on an investment based on the purchase price

question

zero economic growth

answer

the idea that the GDP should increase only enough to accommodate population growth

question

zero more economic quizzes

answer

HAPPY SUMMER CLASS OF 2016 !!!!!! & you're welcome for taking this class before you guys :D - Dan Oldham

Economics: Institutions and Analysis VOCAB p591 + – Flashcards

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