Economics EOC Vocabulary From USATestPrep - Flashcards

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Capital

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This is equipment and factories used in the production of goods and services.

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Capital Good

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A tool or equipment used to produce other goods.

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Capitalism

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This is an economic system where the factors of production are privately owned.

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Command Economy

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This is the general name for an economic system characterized by a central authority which makes major economic decisions.

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Competition

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In economics, this is a rivalry that may refer to rivalry among firms, or individuals, or the race to control resources.

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Consumer

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This term refers to one who buys goods or services for personal use.

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Consumer Empowerment

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This term is an economic and legal concept that buyers should have access to a full range of resources to make informed economic decisions.

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Consumer Good

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This the term for a finished product used by an individual for personal use.

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Consumer Protection Laws

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This term is an economic and legal concept that governments should use regulations to ensure the rights of buyers.

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Consumer Sovereignty

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In a market economy, this is the role of the customer as the ruler of the market; the customer decides what goods and services will be produced.

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Deregulation

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This is the process of reducing or eliminating government regulations on an industry, allowing for more laissez-faire business practices. This has been a major issue in the airline, automobile, and power industries since the 1980s.

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Division Of Labor

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This is the process of separating the tasks in the the process of production and assigning different tasks to different workers.

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Economic System

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This is the way in which a society deals with the production, distribution, and consumption of goods and services.

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Eminent Domain

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This is the right of the government to take private property, like land, for public use.

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Entrepreneur

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This is a person who takes the risk of a new business enterprise.

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Factors Of Production

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Land, labor, capital, and entrepreneurship.

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Government Regulation

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This refers to rules established at some level of government for the purpose of guiding business practices. Although it is commonly accepted that some guiding rules are benefitial to encourage competiton and promote the public good, it is also commonly accepted that it may increase the cost of doing business.

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Harmful Spillover

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This phrase refers to the impact of economic activity upon people who are not directly involved. This phrase describes when the impact is negative.

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Incentive

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Any factor, usually financial, to influence one choice over another by an individual or business.

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Infant Mortality Rate

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This is the number of newborns dying under a year of age divided by the total number of births, times 1000.

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Investment

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Although it has many definitions, this is generally the act of providing funds to a financial organization for the purposes of making that organization more profitable, while earning a personal profit at the same time.

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Labor

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This is one of the main factors of production. It is the measure of the work done by people.

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Land

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This is one of factors of production (productive resource), referring to anything that is taken from the earth during the production of a good or service.

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Literacy Rate

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This is the term that is used to describe the percentage of people in a country who have the ability to read and write.

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Marginal Benefit

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This is an additional or extra benefit associated with an action.

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Marginal Cost

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This is the change in the total cost of an item that occurs when the quantity produced changes by one unit.

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Market Economy

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This is an economy in which the government has little to say about what, how, and for whom goods are produced; the factors of production are privately owned

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Medicaid

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This is a health program sponsored by the United States Government that provides services to individuals and families with low incomes.

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Medicare

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Created in 1966, this is the US publicly funded health insurance program for the elderly and the disabled.

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Mixed Economy

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This is the name given to an economy that may contain market, command, and/or traditional economic systems.

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Natural Resources

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These are types of resources that are found on or in the earth and are used in the production of goods and services.

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Nonrenewable Resources

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These are materials found in nature that are used in the production of goods and services but whose supply is limited and finite.

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Opportunity Cost

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This is the value lost when one alternative is chosen over another.

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Patent

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This is a legally granted exclusive right to produce a product a process for a given period of time, usually to the inventor of that product or process.

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Production Possibilities Frontier

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This is a diagram showing the maximum amount of goods and/or services an economy can produce.

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Productivity

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This is the amount of goods or services produced per input used.

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Profit Motive

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In a market economy, this is the driving force that encourages individuals and organizations to improve their material well-being.

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Property

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This tax is locally assessed, varies according to the worth of land and goods on it, and generally funds things like public schools.

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Public Housing

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This is the name given to homes and apartments that are managed by federal, state, and/or local government agencies in order to assist low-income families in finding a place to live.

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Public Services

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This is the primary use of tax revenue in many states, examples include schools, roads, fire-fighters and law enforcement officers.

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Regulation

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These are the legal restrictions set forth by a government to produce desired outcomes.

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Renewable Resources

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These are materials found in nature that are used in the production of goods and services and that are replenished on a consistent basis.

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Resources

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These are the factors of production used in the making of goods and services.

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Scarcity

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This is when resources are limited and the need for a good or service is higher for a society than what is produced.

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Specialization

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This is when each worker performs a specific task in production.

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Standard Of Living

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This is the term used to describe the general way in which people live, focusing primarily on things like average income, health care availability, life expectancy, educational attainment, etc.

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Trade Off

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This is an economic situation related to opportunity cost in which one thing is given up in order to do something else.

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Voluntary Exchange

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This is the act of buyers and sellers freely and willingly engaging in market transactions.

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Welfare

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Government support for the poor and otherwise disadvantaged members of the society, usually through provision of free and/or subsidized goods and services, such as house, food stamps, and healthcare.

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Buyer

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This is the person or persons who purchase a good or service.

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Circular Flow Diagram

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This is the two sector economic model showing how firms, or businesses, and consumers, or households, interact.

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Complementary Product

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This is a physical item that has an increase in demand when the price of another item decreases in Economics.

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Corporation

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A type of business organization where the business is recognized as a legal entity with the right to sell stock.

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Demand

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This is the amount of a good or service that consumers are willing and able to buy at a given price at a given time.

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Demand Curve

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This is the graph that shows the relationship between the price of a good and the amount of it that buyers are willing to purchase at that price.

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Demand Elasticity

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This is the relationship between changes in the demand quantity of a good and the changes in its price.

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Elastic

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This is when the demand for a product is highly responsive to changes in price.

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Equilibrium Price

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Determined by the intersection of the supply and demand curves on a graph

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Factor Market

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that part of the economy where labor and resources are sold

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Goods

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In economic terms, this is a product that can be used to satisfy a want or need.

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Households

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This is the section of the economy made up of individuals and/or families. It is one of the main sectors.

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Inelastic

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This is when the demand of a product is weakly responsive to price changes.

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Law Of Demand

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This is the rule stating that more of a product will be consumed at a lower price and less will be consumed at a higher price.

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Law Of Supply

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the rule which states that more of a product will be produced when the price is high and less will be produced when the price is low

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Market

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This is the arrangement where buyers and sellers learn information from one another and voluntarily exchange goods, services and money.

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Market Structure

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This describes the state of a market with respect to competition.

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Market Value

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The ________ value of an item is the actual amount of money buyers are willing to pay for it.

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Medium Of Exchange

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This is a function of money in which any item such as currency that is widely accepted in the exchange of other goods or services.

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Money

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This is the legally accepted payment for goods and services.

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Monopolistic Competition

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This is a market structure where there are many producers selling differentiated products (substitutes but are not exactly alike), no one firm has total control over price, there are few barriers to entry, but consumers feel there are nonprice differences between the goods sold.

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Monopoly

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This is when one company controls the market for a certain product, there is no competition.

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Oligopoly

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This is a market where a few large suppliers control the supply of a product.

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Partnership

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an unincorporated business owned and run by two or more people

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Perfect Competition

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This is a market form where no producer or consumer has the market power to influence prices. It is theoretical.

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Price

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This is the monetary value assigned to a product or service.

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Price Ceiling

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This is the term for the maximum legal price that can be charged for a product.

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Price Floor

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This is the lowest legal price that can be charged for a product.

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Product Market

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This is where goods and services are sold in the circular flow model of income in economic theory.

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Profit

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This is the difference between how much money a business makes and how much it costs to make their goods.

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Resource Market

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This is where labor and other factors of production are sold in the circular flow model of income in economic theory.

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Services

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In economic terms, this is something that someone does for you, like give you a haircut or teach you social studies.

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Shortage

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the situation which exists when the quantity demanded is greater than the quantity supplied

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Sole Proprietorship

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This is an unincorporated business owned and run by one person.

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Store Of Value

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This is a function of money in which any commodity, such as gold or currency, can be saved for later use.

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Substitute Product

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This refers to a product that a purchaser may use in place of another product; if the demand for one goes up the demand for the other usually goes down.

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Supply

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This is the amount of a good or service that producers are willing to produce at a given time.

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Supply Curve

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This is a graphic representation of the quantity producers are willing to produce at different prices.

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Supply Elasticity

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This is the responsiveness of the distribution of a good to the amount charged for a good in Economics.

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Surplus

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the situation that exists when the quantity supplied of an item is greater than the quantity demanded

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Aggregate Demand

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This is the total amount of goods and services consumers are willing to buy.

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Aggregate Supply

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the total supply of all the goods and services available in an economy

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Business Cycle

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This refers to the changes in economic activity of a company over the long term.

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Central Bank

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This is a financial institution responsible for the monetary policy of a country.

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Consumer Price Index

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This is an economic measure of inflation in the domestic economy, and is determined by tracking the prices of a specific set of goods and services purchased by the public.

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Cyclical Unemployment

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Unemployment that is caused by a downturn in the business cycle

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Deflation

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This is a general decrease in the level of prices.

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Depression

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This an economic term that refers to prolonged period of economic decline with large numbers of unemployed, shrinking incomes, and general economic hardship.

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Discount Rate

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This is the interest rate charged by the Federal Reserve for loans to member banks.

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Disposable Income

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This is the economic term that refers to one's total income that is left following the payment of all required taxes.

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Economic Growth

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This is the increase in the value of the goods and services produced by an economy.

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Excise Tax

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This is a tax on production, transportation, sale or consumption of a certain good or service.

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FDIC

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This was a federally sponsored corporation which insures deposits in national banks and certain other qualifying financial institutions up to a stated amount.

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Federal Reserve System

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This is the central bank of the United States.

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Final Goods

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This economics term refers to any tangible item that is produced and eventually consumed by the buyer; they are used when calculating GDP.

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Fiscal Policy

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the government program of spending and taxation to promote desired economic goals for the nation

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Frictional Unemployment

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Unemployment caused by people changing jobs.

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GDP Per Capita

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This one of the measures of national income and output for a given country's economy and is defined as the total market value of all final goods and services produced within the country in a calendar year.

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Government Deficit

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This occurs when a government spends more money than it takes in.

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Gross Domestic Product

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The total value of all the goods and services produced within a country in a given year

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Income Tax

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This is a tax levied on net personal or business income.

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Inflation

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A rise in the general level of prices.

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Interest Rate

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The percentage of a financial loan which is paid as a fee over a period of time.

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Macroeconomics

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This is the study of an economy as a whole.

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Monetary Policy

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a plan of the government to regulate the money supply in the nation

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National Debt

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This is the total amount of money a nation owes its creditors.

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Open Market

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This is a freely competitive market operating without government-imposed restrictions.

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Open Market Transaction

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This phrase refers to most stock market transactions where an investor purchases stock shares. In this situation, the purchase indicates that the investor believes that the stock will gain value.

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Payroll Taxes

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These are withholdings from employees' wages paid to the federal, state, or local governments.

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Producer Price Index

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This is an economic indicator that is computed by the Bureau of Labor statistics and is meant to measure the average change in prices received by US producers for their goods over a period of time.

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Recession

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This is a decline in a country's GDP for two or more successive quarters. It is usually characterized by a significant decline in economic activity.

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Regressive

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This is a type of taxation that takes a higher percentage of one's salary as one's income decreases.

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Regulation

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These are the legal restrictions set forth by a government to produce desired outcomes.

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Reserve Requirement

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This is the percentage of their deposits that member banks must keep available in a Federal Reserve Bank.

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Revenue

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This is the total amount of money that is brought into a company or government by its business activities or taxation policies.

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Stagflation

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This is a period of large price inflation combined with no output growth, increasing unemployment, and a recession.

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Structural Unemployment

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Unemployment that is caused by changes in technology or reduced demand for certain products.

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Transfer Payment

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a payment made by the government to someone who does not produce a good or service in return

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Unemployment

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This is the lack of jobs for willing workers.

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Unemployment Rate

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This term refers to the percentage of the civilian workforce who are available for a job but do not have one.

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Absolute Advantage

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This is the ability of a nation or region to produce more of a certain product than another country or region.

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ASEAN

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This is a political and economic organization of 10 countries in Southeast Asia to improve economic growth.

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Balance Of Payments

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This measures the flow of payments between one country and all other countries.

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Balance Of Trade

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This is the difference in the monetary value of exports and imports for a country.

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Commodity Money

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This is a type of money whose value comes from the item form which it is made, often precious metals such as silver or gold.

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Comparative Advantage

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This is the ability of one country or region to specialize in producing a good that another country can produce for the purposes of trade.

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Currency

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The paper money and coins that make up the money supply of a nation.

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Embargo

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This is the process of prohibiting commerce and trade with another country. This is often done to affect the country to change an internal policy.

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European Union

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This is a political and economic group that was formed in 1992 to encourage cooperation between the 27 member states.

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Exchange Rate

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the value of one currency expressed in terms of another

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Export

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This is any good transported from one country to another.

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Fixed Exchange Rate

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This occurs when the value of a currency is matched to another currency or other value, such as gold.

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Foreign Exchange Rate

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This is the amount of currency that can be traded for another country's currency at any given time.

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Free Trade

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This is the practice of goods being traded between countries without any (or with reduced) tariffs that might slow down trade.

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Imports

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These are goods that are brought into one country from another.

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Money

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This is the legally accepted payment for goods and services.

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NAFTA

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This is an agreement signed in 1993 to reduce tariffs between the United States, Canada, and Mexico

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Protective Tariff

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This is a tax on imported goods designed to prevent domestic companies from having to compete with foreign goods of lower price or superior quality.

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Purchasing Power

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This is the amount that money can buy.

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Quota

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This is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.

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Sanction

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This is the name for a category of trade barriers that a country may impose on another country or countries.

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Subsidy

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This is financial assistance from the government to encourage the production of or the purchase of a good.

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Tariff

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This is a tax on imported goods and is usually designed to protect domestic production of similar goods.

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Trade

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This is general name for the voluntary exchange of goods and or services.

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Trade Barrier

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This is a restriction to regulate international commerce and business.

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Trade Deficit

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a condition in international trade when the value of the imports into a nation is greater than the value of its exports

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Trade Surplus

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This occurs when a country exports more than it imports.

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Unfavorable Balance Of Trade

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This is a situation that exists when a country imports more than it exports.

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Automobile Insurance

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This is used as protection against financial loss in the event of an accident while driving, or theft.

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Bond

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This is a contract to repay borrowed money, often issued by a company. This issues financial security for a debt.

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Certificate Of Deposit

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This type of investment account has a specific fixed term/length, fixed interest rate, is insured by the FDIC, and is very low risk to consumers.

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Compound Interest

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This is a method of calculating interest in which the interest is added to the principal each period so that the principal continues to grow throughout the life of the loan or investment. The formula is A = C * (1 + r/100)n where A is the future value, C is the principal, r is the interest rate per period, and n is the number of periods.

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Credit

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Ability to obtain goods and services before payment, or money lent or made available, both with specific guidelines for repayment.

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Credit Union

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a nonprofit cooperative that accepts deposits, makes loans, and provides other financial services

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Credit Worthiness

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This is a measurement as to the likelihood of whether or not a person will default on a loan provided to them by a lending institution.

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Current Yield

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The annual interest rate paid by a bond. It does not reflect the interest rate paid over the life of the bond.

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Debt

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This situation occurs when an entity- a person, business, or government- owes money to another entity.

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Deductible

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The dollar amount of expenses that must be paid out of pocket before an insurer will pay any expenses for loss or liability.

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Disability Insurance

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A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.

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Earnings

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This is a payment usually of money for labor or services usually according to contract and on an hourly basis.

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Health Insurance

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This is used to pay for expenses related to maintaining the wellness of a person. Among countries, there are many varieties of government and privately-sponsored programs.

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Incentive

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Any factor, usually financial, to influence one choice over another by an individual or business.

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Income

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This is money that is gained for goods or services by an individual or business.

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Insurance

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A form of risk management purchased by a business or individual against a possible financial loss paid in the form of a monthly or annual premium.

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Interest

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This is a total charge that is applied to a person when they borrow money.

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Investment

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Although it has many definitions, this is generally the act of providing funds to a financial organization for the purposes of making that organization more profitable, while earning a personal profit at the same time.

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IRA

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This is special savings account created for an individual to spend when the person stops employment completely. It often has many tax advantages over a regular savings account.

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Lender

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The institution or individual that loans money to an individual or business at a set interest rate over a set period of time.

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Liability

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To be at fault, either financially or legally.

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Life Insurance

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A special type of insurance paid to family or primary beneficiary at the time of death of the policy holder.

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Loss

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The dollar amount of an insured's financial injury by death or damage that the insurer is financially responsible.

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Money Market

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A type of checking account that also earns interest. These accounts generally have a higher minimum balance.

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Mutual Fund

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A collection of investments, usually stocks, bonds, and other securities managed by a portfolio manager. The collective investment gains or loses value as a group. Generally the group of items spread the risk of items purchased individually. The net proceeds are passed to the individual investors.

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Personal Debt

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This term typically refers to money that a person owes to someone or to a financial institution.

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Preferred Stock

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certificate of ownership in a corporation which does not entitle the holder to vote, but does give claim to the assets of the company before the common shareholder

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Premium

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The amount to be charged for a certain amount of insurance coverage.

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Prime Rate

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the lowest interest rate which banks charge their most reliable customers

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Professional

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A worker with a high level of specialized training or education that is almost always formalized.

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Progressive Tax

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a tax where the percentage paid in tax increases as the level of income rises

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Property

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This tax is locally assessed, varies according to the worth of land and goods on it, and generally funds things like public schools.

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Property Insurance

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This specific type of policy is used as protection against financial loss in the event of damage to a structure or land.

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Proportional

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This is a type of taxation that takes the same percentage of one's income regardless of how much or how little one makes.

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Reasonable Domain

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This is what we call a domain which has been restricted because of the real-world problem is it being used to model.

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Return

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The profit or loss derived from an investment.

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Risk

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The potential that an investment will lose money.

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Sales Tax

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This is a tax on goods and services, a percentage of the retail price.

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Savings

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This is the name to a type of bank account used by a person who wants to safely store their money over a long period of time, earning interest during that process.

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Semi

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skilled Labor - Workers that may master a specific job with a few weeks of limited training.

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Simple Interest Formula

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The formula I = prt, where p stands for principal, r represents rate, and t represents time in years.

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Skilled Labor

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Labor with a high level of training, education, and experience.

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Skills

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The abilities acquired by workers through education, training, and experience that permit workers to be more productive.

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SPLOST

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This tax can be levied by any county for the purpose of funding the building and maintenance of parks, schools, roads, and other public facilities.

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Stock

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Certificate of ownership in a company which entitles the shareholder to vote for the board of directors of the corporation.

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Unskilled Labor

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This is the economic term for workers who are not trained to do a specific task or operate specialized machinery.

Economics EOC Vocabulary From USATestPrep – Flashcards

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