Economics Chapters 3

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economic freedom
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[economic freedom: the ability of people to make their own economic decisions without interference from the government]
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full employment
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[full employment: a condition in which everyone who wants to work can find a job]
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Economic equity
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[economic equity: the fairness with which an economy distributes its resources and wealth]
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Economic growth
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[economic growth: a condition in which an economy is expanding and producing more and better goods and services]
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economic security
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[economic security: the idea that the less fortunate members of society should get the economic support they need to live a decent life]
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Economic stability
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[economic stability: a condition in which the goods and services people count on are available when they want them]
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economic system
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[economic system: a society’s way of coordinating the production and consumption of goods and services]
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traditional economy
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[traditional economy: an economic system in which decisions about production and consumption are based on custom and tradition]
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command economy
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[command economy: an economic system in which decisions about production and consumption are made by a powerful ruler or government]
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market economy
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[market economy: an economic system in which economic decisions are left up to individual producers and consumers]
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free market economy
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[free market economy: an economic system in which the workings of the market are not planned or directed]
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circular flow model
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[circular flow model: a diagram that shows the circular movement of money, resources, and goods and services among households and producers in an economy]
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household
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[household: a person or a group of people living together]
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firm
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[firm: an organization that uses resources to produce and sell goods or services; a business]
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product market
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[product market: a market in which firms sell goods and services to households]
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factor market
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[factor market: a market in which households sell land, labor, and capital to firms]
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factor payments
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[factor payment: income earned when an individual sells or rents a factor of production that he or she owns; for example, wages are a factor payment made to workers in exchange for their labor]
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Industrial Revolution
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[Industrial Revolution: a period of rapid industrial growth and development during the 1700s and 1800s]
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capitalists
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[capitalist: an individual investor who accumulates capital, such as machinery, factories, and railroads]
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capitalism
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[capitalism: the free market economic system]
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Socialism
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[socialism: a political and economic philosophy based on collective or government ownership of a society’s resources and means of production, with the goal of achieving social and economic equality]
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communism
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[communism: a political and economic system in which all property and wealth is collectively owned by all members of society; the final stage of socialism in Marxist theory]
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Economic planning
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[economic planning: the process by which economic decisions are made or influenced by central governments rather than by private individuals]
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mixed economy
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[mixed economy: an economic system in which both the government and individuals play important roles in production and consumption; most modern economies are mixed economies]
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public works
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[public works: government-financed projects such as dams, highways, and bridges]
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transfer payments
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[transfer payment: a government payment to a household or firm for which the payer receives no good or service in return; examples include Social Security checks and unemployment benefits]
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free enterprise system
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[free enterprise system: an economic system in which the means of production are mostly privately owned and operated for profit]
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laissez-faire
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[laissez-faire: the principle that government should not interfere with the workings of the economy; a French term meaning \”let them do\”]
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contract
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[contract: an agreement between a buyer and a seller]
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Property rights
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[property rights: the rights of those who own land, buildings, or other goods to use or dispose of their property as they choose]
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Intellectual property
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[intellectual property: creations of the mind that have commercial value, such as inventions and works of art]
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copyright
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[copyright: a legal protection that gives creators and publishers of books, music, software, and artistic works the sole right to distribute, perform, or display that work]
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Profit
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[profit: the money earned by a business after subtracting its operation costs]
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profit motive
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[profit motive: the desire to make a profit]

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