Economics Matching/Definitions – Flashcards
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the condition of wants exceeding all available resources
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scarcity
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system in which economic decisions are based on customs that have been handed down for generations
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traditional economy
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previously manufactured goods used to make other goods and services
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capital
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foregoing one good or service to purchase or produce another one
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trade-off
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natural resources
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land
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balancing economic policy so that everyone benefits fairly
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economic equity
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expansion of the economy to produce more goods, jobs, and wealth
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economic growth
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system where government controls the factors of production and makes all decisions about their use
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command economy
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material well-being as measured by how well necessities and luxuries are satisfied
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standard of living
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system where private individuals own the factors of production and decide how to use them
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capitalism
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human effort directed toward producing goods and services
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labor
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cost of credit stated monthly in dollars and cents
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finance charge
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fees involved in transferring ownership of property or securing a mortgage
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closing costs
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making the choice that has the greatest value from among comparable quality products
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rational choice
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money that is left to spend on extras after the necessities have been bought
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discretionary income
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income remaining for a person to spend or save after paying taxes
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disposable income
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investment company that pools the money of individuals to buy stocks, bonds, or other investments
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mutual fund
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amount of money originally borrowed in a loan
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principal
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deceptive advertising that lures buyers into the store with a low-priced product, at which point the salesperson tries to sell the buyer a high-priced product instead
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bait and switch
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installment debt on a home or other building
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mortgage
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rating the risk involved in loaning money to a person
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credit rating
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cost of credit stated as a yearly percentage
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annual percentage rate
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spreading risk among several different types of investments
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diversification
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payment for the use of borrowed money
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investment
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consumers' responsiveness to a change in price
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elasticity
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freely exchanging goods and services between buyers and sellers
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market
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the amount of a good or service that a consumer is willing and able to buy at various prices during a specified period
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demand
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amount of good or service that producers are willing and able to sell at various during a specified period
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supply
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a product often used with another product
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complementary good
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any use of land, labor, and capital that produces goods and services efficiently
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technology
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condition where quantity demanded exceeds quantity supplied
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shortage
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condition where quantity supplied exceeds quantity demanded
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surplus
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price and quantity supplied move in the same direction
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law of supply
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quantity demanded and price move in opposite directions
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law of demand
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if two items satisfy the same need and the price of one rises, consumers will buy the other
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substitution effect
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the price at which the amount producers are willing to supply is equal to the amount consumers are willing to buy
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equilibrium price
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ability of any good or service to satisfy wants
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utility
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the distribution of goods and services based on something other than price
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rationing
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the person who organizes, manages, and assumes the risks of a business in order to gain profits
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entrepreneur
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all items to which a business or households holds legal claim
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assets
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requirement that an owner is personally and fully responsible for all losses and debts of a business
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unlimited liability
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extra supply of the items used in a business. such as raw materials or goods for sale
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inventory
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reduction of government control over business activity
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deregulation
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a large corporation made up of smaller corporations dealing in unrelated business
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conglomerate
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obstacles to competition that prevent others from entering a market
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barriers to entry
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decrease in long-run average costs of producing that result from large size or scale of output
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economics of scale
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share of ownership in a corporation that entitles the buyer to a share of future profits and assets of the corporation
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stock
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license to operate granted to a corporation by the state where it is established
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corporate charter
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the amount of competition that exists in particular markets
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market structure
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arrangement among groups of industrial businesses to reduce competition by controlling the price, production, and distribution of goods
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cartel
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agency that assists new businesses by providing advice or low-rent buildings
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small business incubator
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a beginning business enterprise
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startup
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partnership set p for a specific purpose just for a short period of time
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joint venture
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raising money for a business through borrowing
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debt financing
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workers employed in crafts, manufacturing, and nonfarm labor
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blue-collar workers
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all the activities needed to mover goods and services from the producer to the consumer
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marketing
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practice of setting prices close to those charged by other companies selling similar products
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price leadership
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total income from sales output
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revenues
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obtaining funds or money capital for business expansion
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financing
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workers employed in offices, sales, or professional positions
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white-collar workers
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state laws forbidding unions from forcing workers to join and pay union dues
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right-to-work laws
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changing resources into goods
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production
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breaking down of a job into small tasks performed by different workers
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division of labor
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economic pressure exerted by unions urging the public not to purchase products from a company
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boycott
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association of workers organized to improve wages and working conditions
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labor union
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an additional wage increase given to match the rise in the general level of prices in an economy
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cost-of-living adjustment
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conducting business over computer networks
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e-commerce
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combined labor of people and machines
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mechanization
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union negotiation of employment conditions
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collective bargaining
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measuring the nation's economic performance
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national income accounting
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card that automatically transfers from a checking account to a store's bank account
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debit card
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statistics that suggest what may happen in the economy
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leading indicators
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measure of change in prices on goods and services used by the average household
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consumer price index
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banking system where only a fraction of the deposits is kept on hand
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fractional reserve banking
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mutual savings banks, S&Ls, and credit unions
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thrift institutions
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exchange of goods and services for other goods and services
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barter
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total income that individuals receive before paying personal taxes
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personal income
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price index that removes the effect of inflation from GDP
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GDP price deflator
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total income earned by everyone in the economy
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national income
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broad definition of money including mutual fund balances and certificates of deposit
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M2
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coins, currency, and checkable deposits
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M1
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difference between what a nation sells to other countries and what it buys from other countries
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net exports
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fall in the price of a currency
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depreciation
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measure of change in price that U.S. producers charge for their goods and services
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producer price index
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irregular changes in the level of total output measured by real GDP
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business cycle
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computerizing various bank functions that were once handled on paper
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electronic funds transfer
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total amount of outstanding debt for the federal government
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national debt
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when government receipts is larger than expenditures during the fiscal year
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budget surplus
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periods between the time fiscal policy is enacted and the time it becomes effective
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time lags
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when the unemployment rate is less than 5 percent
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full employment
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publicly used facilities built by the government with public money
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public-works projects
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goods or services that the government supplies to its citizens
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public goods
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economic side-effects that affect an uninvolved third party
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externalities
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transactions by people who do not report earnings
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underground economy
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government program that extends payments for medical care to workers injured on the job
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underground economy
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government policy of spending more than it brings in through revenues
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deficit financing
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when government spending exceeds government receipts
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budget deficit
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federal programs that include food stamps, veterans' benefits, and payments to the aged, blind, and disabled
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Supplemental Security Income
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provides money to needy single parents raising young children
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Temporary Assistance to Needy Families
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system where a national government sets the value of its currency in relation to a single standard
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fixed rate of exchange
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system where government controls the entire economy and advocates the violent overthrow of capitalism
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authoritarian socialism
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system with a constitutional framework, socialist officials, and government control of some areas of the economy
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democratic socialism
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tax on imports used to raise the cost of imports and protect domestic producers
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protective tariff
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trade agreement between Mexico, Canada, and the United States
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North America Free Trade Agreement
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term coined by Karl Marx to describe his ideal society in which no government was necessary
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communism
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offers monetary advice and provides loans to developing countries
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International Monetary Fund
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idea that a nation should produce those things for which it is best suited
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specialization
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change from state ownership to private ownership
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privatization
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tax on imports to raise revenue without limiting imports
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revenue tariff
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when the forces of supply and demand are allowed to set the price of currencies
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flexible exchange rates
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centralized planning system that was the basis for China's economic system
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five-year plans
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world's largest trade organization
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World Trade Organization
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country that combines private ownership of the means of production with the goal of social equality for its citizens
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welfare state
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marketing directed by stored information about the frequency of a customer's use of a product
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frequency marketing
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the purchase by foreigners of real estate and businesses in another country
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direct foreign investment
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education provided via telecommunications technology
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distance learning
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conducting business transactions over computer networks
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e-commerce
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creations of a person's intellect that are protected by copyright law
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intellectual property
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interdependency among the countries of the world
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global integration
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firms that do business and have offices or factories in many countries
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multinationals
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the period when telecommunications and computer technology gave information significant economic value
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information age
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term coined to identify an economy based on products that are not tangible
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weightless economy
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nations with little industrial development and low standards of living
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developing nations
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development of new products that have wide-ranging effects
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innovation
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placement of businesses and key industries under government ownership
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nationalization
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the legal or illegal export of currency or money capital from a nation by that nation's leaders
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capital flight
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growing of just enough food by a family to take care of its own needs
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subsistence agriculture
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Are all these definitions guaranteed correct?
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YES!
