Holt McDougal: Economics Concepts and Choices – Flashcards
461 test answers
Unlock all answers in this set
Unlock answers 461question
appropriations
answer
n. set amounts of money put aside for specific purposes (p. 431)
Unlock the answer
question
authoritarian
answer
adj. requiring absolute loyalty and obedience to authority (p. 43)
Unlock the answer
question
automated teller machine (ATM)
answer
n. an electronic device that allows bank customers to make transactions without seeing a bank officer (p. 308)
Unlock the answer
question
automatic stabilizer
answer
n. a feature of fi scal policy that works automatically to steady the economy (p. 447)
Unlock the answer
question
balanced budget
answer
n. a budget in which total government revenue is equal to total government spending (p. 436)
Unlock the answer
question
balance of payments
answer
n. a record of all the transactions that occurred between the individuals, businesses, and government units of one nation and those of the rest of the world (p. 529)
Unlock the answer
question
balance of trade
answer
n. the difference between the value of a country's imports and exports (p. 529)
Unlock the answer
question
bank exam
answer
n. an audit, conducted by the Federal Reserve, of a bank's financial practices (p. 481)
Unlock the answer
question
bank holding company
answer
n. a company that owns more than one bank (p. 481)
Unlock the answer
question
barrier to entry
answer
n. anything that hinders a business from entering a market (p. 198)
Unlock the answer
question
barter
answer
n. the exchange of goods and services without using money (p. 288)
Unlock the answer
question
bear market
answer
n. a situation in which stock market prices decline steadily over time (p. 335)
Unlock the answer
question
binding arbitration
answer
n. a process by which an impartial third party resolves disputes between management and unions (p. 280)
Unlock the answer
question
black market
answer
n. the illegal business of buying or selling goods or services in violation of price controls or rationing (p. 183)
Unlock the answer
question
Board of Governors
answer
n. the board of seven appointed members that supervises the operations of the Federal Reserve System and sets monetary policy (p. 476)
Unlock the answer
question
bond
answer
n. a contract a corporation issues that promises to repay borrowed money, plus interest, on a fixed schedule (p. 240)
Unlock the answer
question
break-even point
answer
n. a situation in which total costs and total revenues are the same (p. 142)
Unlock the answer
question
budget
answer
n. a plan for allocating income for saving and spending (p. 574)
Unlock the answer
question
budget deficit
answer
n. a situation in which the government spends more than it takes in (p. 462)
Unlock the answer
question
budget surplus
answer
n. a situation in which the government takes in more than it spends (p. 462)
Unlock the answer
question
bull market
answer
n. a situation in which stock market prices rise steadily over time (p. 335)
Unlock the answer
question
business cycle
answer
n. the series of growing and shrinking periods of economic activity, measured by increases or decreases in real gross domestic product (p. 358)
Unlock the answer
question
business organization
answer
n. an enterprise that produces goods or provides services, usually to make a profit (p. 226)
Unlock the answer
question
capital
answer
n. all the resources people make and use to produce and distribute goods and services (p. 8)
Unlock the answer
question
capital budget
answer
n. a plan for major expenses or investments (p. 436)
Unlock the answer
question
capital deepening
answer
n. an increase in the ratio of capital to labor (p. 371)
Unlock the answer
question
capital flight
answer
n. a situation in which capital from a country is invested outside the country (p. 558)
Unlock the answer
question
capital gain
answer
n. the profit made from the sale of securities (p. 330)
Unlock the answer
question
capitalism
answer
n. an economic system based on private ownership of the factors of production (p. 49)
Unlock the answer
question
capital market
answer
n. a market in which long-term financial assets are bought and sold (p. 322)
Unlock the answer
question
cartel
answer
n. a formal organization of sellers or producers who regulate the production, pricing, and marketing of a product (pp. 198, 535)
Unlock the answer
question
cease and desist order
answer
n. a ruling requiring a firm to stop an unfair business practice (p. 217)
Unlock the answer
question
central bank
answer
n. a nation's main monetary authority (p. 474)
Unlock the answer
question
centrally planned economy
answer
n. a system in which the society's leaders make all economic decisions (p. 42)
Unlock the answer
question
change in demand
answer
n. a situation in which a change in the marketplace prompts consumers to buy different amounts of a good or service at every price (p. 109)
Unlock the answer
question
change in quantity demanded
answer
n. a change in the amount of a product that consumers will buy because of a change in price (p. 108)
Unlock the answer
question
change in quantity supplied
answer
n. an increase or decrease in the amount of a good or service that producers are willing to sell because of a change in price (p. 146)
Unlock the answer
question
change in supply
answer
n. a situation in which a change in the marketplace prompts producers to offer different amounts for sale at every price (p. 148)
Unlock the answer
question
check clearing
answer
n. a service provided by the Federal Reserve to record receipts and expenditures of bank clients (p. 480)
Unlock the answer
question
circular flow model
answer
n. a visualization of all interactions in a market economy (p. 52)
Unlock the answer
question
civilian labor force
answer
n. people age 16 or older who are employed or actively looking for and available to do work (p. 266)
Unlock the answer
question
claim
answer
n. a request to an insurance company for payment on an insured loss (p. 596)
Unlock the answer
question
closed shop
answer
n. a business in which an employer can hire only union members (p. 279)
Unlock the answer
question
coincident indicators
answer
n. measures of economic performance that usually change at the same time as real gross domestic product changes (p. 364)
Unlock the answer
question
collective bargaining
answer
n. the process of negotiation between a business and its organized employees to establish wages and improve working conditions (p. 280)
Unlock the answer
question
command economy
answer
n. an economic system in which the government makes all economic decisions (p. 39)
Unlock the answer
question
commodity money
answer
n. money that has intrinsic value based on the material from which it is made (p. 291)
Unlock the answer
question
common stock
answer
n. a share of ownership in a corporation that gives the holder voting rights and a share of profits (p. 331)
Unlock the answer
question
communism
answer
n. an economic system in which there is no private ownership of property and little or no political freedom (p. 43)
Unlock the answer
question
comparative advantage
answer
n. the ability of one trading nation to produce something at a lower opportunity cost than that of another trading nation (p. 513)
Unlock the answer
question
competition
answer
n. the effort of two or more people acting independently to get business by offering the best deal (p. 49)
Unlock the answer
question
competitive pricing
answer
n. a situation in which producers sell goods and services at prices that best balance the twin desires of making the highest profit and luring customers away from rival producers (p. 174)
Unlock the answer
question
complements
answer
n. products that are used together, so the increase or decrease in demand for one will result in an increase or decrease in demand for the other (p. 112)
Unlock the answer
question
conglomerate
answer
n. a business composed of companies that produce unrelated goods or services (p. 243)
Unlock the answer
question
consumer
answer
n. a person who buys goods or services for personal use (p. 5)
Unlock the answer
question
consumer price index (CPI)
answer
n. a measure of changes in the prices of goods and services that consumers commonly purchase (p. 396)
Unlock the answer
question
consumer sovereignty
answer
n. the idea that consumers have the ultimate control over what is produced because they are free to buy what they want and refuse products they do not want (p. 50)
Unlock the answer
question
contingent employment
answer
n. temporary or part-time work (p. 270)
Unlock the answer
question
contract
answer
n. a formal, legally binding agreement (p. 598)
Unlock the answer
question
contraction
answer
n. a decrease in economic activity (p. 359)
Unlock the answer
question
contractionary fiscal policy
answer
n. a plan to reduce aggregate demand and slow down the economy during a period of too rapid economic expansion (p. 446)
Unlock the answer
question
contractionary monetary policy
answer
n. a plan to reduce the amount of money in circulation; also called tight-money policy (p. 492)
Unlock the answer
question
cooperative
answer
n. a type of business operated for the shared benefit of the owners, who are also its customers (p. 250)
Unlock the answer
question
co-pay
answer
n. an amount the insured owes when an insured receives health care (p. 596)
Unlock the answer
question
corporate income tax
answer
n. a tax based on a corporation's profits (p. 412)
Unlock the answer
question
corporation
answer
n. a business owned by shareholders, also called stockholders, who own the rights to the company's profits but face only limited liability for the company's debts and losses (p. 238)
Unlock the answer
question
cosigner
answer
n. a person who assumes responsibility for the debt if the borrower fails to repay the loan (p. 583)
Unlock the answer
question
cost-benefit analysis
answer
n. the practice of examining the costs and the expected benefits of a choice as an aid to decision making (p. 15)
Unlock the answer
question
cost-push inflation
answer
n. a situation in which increases in production costs push up prices (p. 399)
Unlock the answer
question
Council of Economic Advisers
answer
n. the three-member group that advises the President on fiscal policy and other economic issues (p. 452)
Unlock the answer
question
coupon rate
answer
n. the interest rate a bond-holder receives every year until the bond matures (p. 338)
Unlock the answer
question
craft union
answer
n. an organization of workers with similar skills who work in different industries for different employers (p. 274)
Unlock the answer
question
credit
answer
n. the practice of buying goods or services now and paying for them in the future (p. 582)
Unlock the answer
question
credit report
answer
n. a statement by a credit bureau that details a consumer's credit record (p. 586)
Unlock the answer
question
credit score
answer
n. a number that summarizes a consumer's creditworthiness (p. 586)
Unlock the answer
question
crowding-out effect
answer
n. a situation in which the government outbids private bond interest rates to gain loanable funds (p. 466)
Unlock the answer
question
currency
answer
n. paper money and coins (pp. 293, 475)
Unlock the answer
question
customs duty
answer
n. a tax on goods imported into the United States (p. 425)
Unlock the answer
question
customs unions
answer
n. agreements that abolish trade barriers among the members and establish uniform tariffs for nonmembers (p. 532)
Unlock the answer
question
cyclical unemployment
answer
n. unemployment caused by the part of the business cycle with decreased economic activity (p. 384)
Unlock the answer
question
debit card
answer
n. a card one can use like an ATM card to withdraw cash or like a check to make purchases (p. 308)
Unlock the answer
question
debt restructuring
answer
n. a method countries with outstanding debt obligations use to alter the terms of debt agreements to achieve some advantage (p. 559)
Unlock the answer
question
deductible
answer
n. the amount the insured pays before the insurance company pays (p. 596)
Unlock the answer
question
default
answer
n. the condition that occurs when a nation cannot pay interest or principle on a loan (p. 559)
Unlock the answer
question
deficit spending
answer
n. the government practice of spending more than it collects in revenue for a specific fiscal year (p. 462)
Unlock the answer
question
deflation
answer
n. a decrease in the general price level (p. 398)
Unlock the answer
question
demand
answer
n. the desire to have some good or service and the ability to pay for it (p. 98)
Unlock the answer
question
demand curve
answer
n. a graph that shows a demand schedule, or how much of a good or service an individual is willing and able to purchase at each price (p. 102)
Unlock the answer
question
demand deposits
answer
n. checking accounts, so called because checking accounts can be converted into currency "on demand" (p. 293)
Unlock the answer
question
demand-pull inflation
answer
n. a condition that occurs when total demand rises faster than the production of goods and services (p. 399)
Unlock the answer
question
demand schedule
answer
n. a table that shows how much of a good or service an individual is willing and able to purchase at each price (p. 100)
Unlock the answer
question
demand-side fiscal policy
answer
n. a plan to stimulate aggregate demand (p. 454)
Unlock the answer
question
deposit multiplier formula
answer
n. a mathematical formula that tells how much the money supply will increase after an initial cash deposit in a bank (p. 485)
Unlock the answer
question
depreciate
answer
v. to decrease in value (p. 590)
Unlock the answer
question
depression
answer
n. an extended period of high unemployment and reduced business activity (p. 359)
Unlock the answer
question
deregulation
answer
n. the reduction or elimination of government oversight and control of business (p. 218)
Unlock the answer
question
derived demand
answer
n. a demand for a product or resource based on its contribution to the fi nal product (p. 259)
Unlock the answer
question
developed nations
answer
n. nations that have a market economy, a relatively high standard of living, a high GDP, industrialization, widespread private ownership of private property, and stable and effective governments (p. 544)
Unlock the answer
question
diminishing returns
answer
n. a situation in which new workers cause marginal product to grow but at a decreasing rate (p. 139)
Unlock the answer
question
discount rate
answer
n. the interest rate that the Federal Reserve charges when it lends money to other banks (p. 491)
Unlock the answer
question
discretionary fiscal policy
answer
n. actions taken by the federal government by choice to correct economic instability (p. 446)
Unlock the answer
question
discretionary spending
answer
n. spending that the government must authorize each year (p. 428)
Unlock the answer
question
disequilibrium
answer
n. a situation in which quantity supplied and quantity demanded are not in balance (p. 169)
Unlock the answer
question
disposable personal income (DPI)
answer
n. personal income minus taxes (p. 355)
Unlock the answer
question
diversification
answer
n. the practice of distributing investments among different financial assets to maximize return and limit risk (p. 327)
Unlock the answer
question
dividend
answer
n. the part of a corporation's profit that the company pays the stockholders (p. 238)
Unlock the answer
question
dumping
answer
n. the sale of a product in another country at a price lower than that charged in the home market (p. 521)
Unlock the answer
question
Dumpster diving
answer
n. technique used by identity thieves to gather personal information in the garbage (p. 588)
Unlock the answer
question
economic growth
answer
n. an increase in a nation's real gross domestic product (p. 358)
Unlock the answer
question
economic interdependence
answer
n. a situation in which producers in one nation depend on others to provide goods and services they do not produce (p. 510)
Unlock the answer
question
economic model
answer
n. a simplified representation of economic activities, systems, or problems (p. 18)
Unlock the answer
question
economics
answer
n. the study of how individuals and societies satisfy their unlimited wants with limited resources (p. 4)
Unlock the answer
question
economic system
answer
n. the way in which a society uses its scarce resources to satisfy its people's unlimited wants (p. 38)
Unlock the answer
question
economies of scale
answer
n. a situation in which the average cost of production falls as the producer grows larger (p. 201)
Unlock the answer
question
economize
answer
v. to make decisions according what is believed to be the best combination of costs and benefits (p. 12)
Unlock the answer
question
efficiency
answer
n. the condition in which economic resources are used to produce the maximum amount of goods and services (p. 20)
Unlock the answer
question
elastic
answer
adj. referring to a situation in which a change in price, either up or down, leads to a relatively larger change in the quantity demanded or the quantity supplied (pp. 117, 154)
Unlock the answer
question
elasticity of demand
answer
n. a measure of how responsive consumers are to price changes in the marketplace (p. 117)
Unlock the answer
question
elasticity of supply
answer
n. a measure of how responsive producers are to price changes in the marketplace (p. 154)
Unlock the answer
question
embargo
answer
n. a law that cuts off most or all trade with a specific country (p. 521)
Unlock the answer
question
entitlement
answer
n. a social welfare program with specific eligibility requirements (p. 428)
Unlock the answer
question
entrepreneurship
answer
n. the combination of vision, skill, ingenuity, and willingness to take risks that is needed to create and run new businesses (p. 9)
Unlock the answer
question
equilibrium price
answer
n. the price at which the quantity demanded equals the quantity supplied (p. 164)
Unlock the answer
question
equilibrium wage
answer
n. the wage at which the quantity of workers demanded equals the quantity of workers supplied; the market price for labor (p. 258)
Unlock the answer
question
estate tax
answer
n. a tax on the assets of a person who has died (p. 425)
Unlock the answer
question
European Union (EU)
answer
n. the economic and political union of European nations that was established in 1993 (p. 532)
Unlock the answer
question
euro
answer
n. the single currency of the European Union (p. 533)
Unlock the answer
question
excise tax
answer
n. a tax on the production or sale of a specific good or service (pp. 149, 425)
Unlock the answer
question
expansion
answer
n. an increase in economic activity (p. 358)
Unlock the answer
question
expansionary fiscale policy
answer
n. a plan to increase aggregate demand and stimulate a weak economy (p. 446)
Unlock the answer
question
expansionary monetary policy
answer
n. a plan to increase the amount of money in circulation; also called easy-money policy (p. 492)
Unlock the answer
question
exports
answer
n. goods or services produced in one country and sold to other countries (p. 516)
Unlock the answer
question
externality
answer
n. a side effect of a transaction that affects someone other than the producer or buyer (p. 87)
Unlock the answer
question
factor market
answer
n. the market for the factors of production—land, labor, capital, and entrepreneurship (p. 52)
Unlock the answer
question
factors of production
answer
n. the economic resources needed to produce goods and services (p. 8)
Unlock the answer
question
federal budget
answer
n. a plan for spending federal tax money (p. 431)
Unlock the answer
question
federal funds rate (FFR)
answer
n. the interest at which a depository institution lends available funds to another depository institution overnight (p. 490)
Unlock the answer
question
Federal Insurance Contributions Act (FICA)
answer
n. a payroll tax that provides coverage for the elderly, the unemployed due to disability, and surviving family members of wage earners who have died (p. 423)
Unlock the answer
question
Federal Open Market Committee (FOMC)
answer
n. the Federal Reserve System board that supervises the sale and purchase of federal government securities (p. 477)
Unlock the answer
question
Federal Reserve System
answer
n. the central bank of the United States; commonly called the Fed (p. 474)
Unlock the answer
question
fiat money
answer
n. money that has no tangible backing but is declared by the government and accepted by citizens to have worth (p. 291)
Unlock the answer
question
filing status
answer
n. for filing taxes, based on marital status or support of dependents (p. 604)
Unlock the answer
question
financial asset
answer
n. a claim on a borrower's property (p. 319)
Unlock the answer
question
financial intermediary
answer
n. an institution that collects funds from savers and invests these funds in financial assets (p. 319)
Unlock the answer
question
financial market
answer
n. a situation in which buyers and sellers exchange financial assets (p. 319)
Unlock the answer
question
financial system
answer
n. all the institutions that help transfer funds between savers and investors (p. 318)
Unlock the answer
question
fiscal
answer
adj. of or relating to government revenue and spending (p. 446)
Unlock the answer
question
fiscale policy
answer
n. the federal government's use of taxing and spending to affect the economy (p. 446)
Unlock the answer
question
fiscal year
answer
n. a 12-month period for which an organization plans its expenditures (p. 431)
Unlock the answer
question
fixed costs
answer
n. expenses that business owners incur no matter how much they produce (p. 140)
Unlock the answer
question
fixed rate of exchange
answer
n. a system in which the currency of one nation is fi xed or constant in relation to other currencies (p. 526)
Unlock the answer
question
flexible exchange rate
answer
n. a system in which the exchange rate for currency changes as supply and demand for the currency changes; also called the floating rate (p. 527)
Unlock the answer
question
focus group
answer
n. a moderated discussion with small groups of consumers (p. 208)
Unlock the answer
question
foreign exchange market
answer
n. a market in which currencies of different countries are bought and sold (p. 526)
Unlock the answer
question
foreign exchange rate
answer
n. the price of one currency in the currencies of other nations (p. 526)
Unlock the answer
question
franchise
answer
n. a business made up of semi-independent businesses that all offer the same products or services (p. 248)
Unlock the answer
question
franchisee
answer
n. a semi-independent business that pays a fee for the right to sell the parent company's products or services in a particular area (p. 248)
Unlock the answer
question
free contract
answer
n. a situation in which people decide for themselves which legal agreements to enter into (p. 73)
Unlock the answer
question
free enterprise system
answer
n. another name for capitalism, an economic system based on private ownership of productive resources (p. 70)
Unlock the answer
question
free rider
answer
n. a person who does not pay for a good or service but who benefits from it when it is provided (p. 85)
Unlock the answer
question
free-trade zone
answer
n. a specifi c region in which trade between nations takes place without protective tariffs (p. 532)
Unlock the answer
question
frictional unemployment
answer
n. the temporary unemployment of workers moving from one job to another (p. 384)
Unlock the answer
question
full employment
answer
n. a level of unemployment in which none of the unemployment is caused by decreased economic activity; generally marked by an unemployment rate of 4 to 6 percent (p. 383)
Unlock the answer
question
future
answer
n. a contract to buy or sell a stock on a specified future date at a preset price (p. 333)
Unlock the answer
question
general partnership
answer
n. a partnership in which each partner shares the management of the business and is liable for all business debts and losses (p. 233)
Unlock the answer
question
geographic monopoly
answer
n. a monopoly that exists because there are no other producers or sellers within a certain region (p. 201)
Unlock the answer
question
gift tax
answer
n. a tax on money or property given by one living person to another (p. 425)
Unlock the answer
question
glass ceiling
answer
n. an unseen, artificial barrier to advancement that women and minorities sometimes face (p. 262)
Unlock the answer
question
global economy
answer
n. all the economic interactions that cross international boundaries (p. 61)
Unlock the answer
question
gold standard
answer
n. a system in which the basic monetary unit is equal to a set amount of gold (p. 299)
Unlock the answer
question
goods
answer
n. physical objects, such as food, clothing, and furniture, that can be purchased (p. 5)
Unlock the answer
question
government monopoly
answer
n. a monopoly that exists because the government either owns and runs the business or authorizes only one producer (p. 201)
Unlock the answer
question
grant-in-aid
answer
n. a transfer payment from the federal government to state or local governments (p. 432)
Unlock the answer
question
gross domestic product (GDP)
answer
n. the market value of all final goods and services produced within a nation in a given time period (p. 350)
Unlock the answer
question
gross national product (GNP)
answer
n. the market value of all final goods and services produced by a country in a given time period (p. 355)
Unlock the answer
question
hacking
answer
n. technique used by identity thieves to gather personal information using computers and related technology (p. 588)
Unlock the answer
question
horizontal merger
answer
n. the joining of two or more companies that offer the same or similar products or services (p. 243)
Unlock the answer
question
human capital
answer
n. the knowledge and skills that enable workers to be productive (p. 261)
Unlock the answer
question
human development index (HDI)
answer
n. a combination of a nation's real GDP per capita, life expectancy, adult literacy rate, and student enrollment fi gures that indicates what life is like in a specific country (p. 547)
Unlock the answer
question
hyperinflation
answer
n. a rapid, uncontrolled rate of inflation in excess of 50 percent (p. 398)
Unlock the answer
question
identity theft
answer
n. the use of someone else's personal information for criminal purposes (p. 588)
Unlock the answer
question
imperfect competition
answer
n. a market structure that lacks one or more of the conditions needed for perfect competition (p. 195)
Unlock the answer
question
imports
answer
n. goods or services produced in one country and purchased by another (p. 516)
Unlock the answer
question
incentive
answer
n. a benefit offered to encourage people to act in a certain way (pp. 12, 176)
Unlock the answer
question
incidence of a tax
answer
n. the nal burden of a tax (p. 415)
Unlock the answer
question
income distribution
answer
n. the way income is divided among people in a nation (p. 390)
Unlock the answer
question
income effect
answer
n. a change in the amount of a good or service a consumer will buy because his or her income (and therefore purchasing power) changes (p. 107)
Unlock the answer
question
income inequality
answer
n. the unequal distribution of income (p. 390)
Unlock the answer
question
increasing returns
answer
n. a situation in which hiring new workers cause marginal product to increase (p. 139)
Unlock the answer
question
independent contractor
answer
n. someone who sells his or her services on a contract basis (p. 270)
Unlock the answer
question
individual income tax
answer
n. a tax based on an individual's income from all sources (p. 412)
Unlock the answer
question
industrial union
answer
n. an organization of workers with many different skills who work in the same industry (p. 274)
Unlock the answer
question
inelastic
answer
n. a situation in which quantity demanded or quantity supplied changes little as price changes (pp. 117, 155)
Unlock the answer
question
infant industries
answer
n. new industries that are often unable to compete against larger, more established competitors (p. 523)
Unlock the answer
question
infant mortality rate
answer
n. the number of children who die within the first year of life per 1,000 births (p. 547)
Unlock the answer
question
inferior goods
answer
n. goods that consumers demand less of when their incomes rise (p. 110)
Unlock the answer
question
inflation
answer
n. a sustained rise in the general price level, or a sustained fall in the purchasing power of money (p. 396)
Unlock the answer
question
inflation rate
answer
n. the rate of change in prices over a set period of time (p. 397)
Unlock the answer
question
infrastructure
answer
n. the basic set of support systems—such as power, communications, transportation, water, sanitation, and education systems—needed to keep an economy and society going (pp. 86, 545)
Unlock the answer
question
input costs
answer
n. the price of the resources needed to produce a good or service (p. 148)
Unlock the answer
question
insourcing
answer
n. the practice of foreign companies establishing operations in, and therefore bringing jobs to, the United States (p. 269)
Unlock the answer
question
interest
answer
n. a fee a bank pays for the use of money (p. 578)
Unlock the answer
question
International Monetary Fund (IMF)
answer
n. the international organization established to promote international monetary cooperation, foster economic growth, and provide temporary financial assistance to countries to help ease balance-of payments adjustment (p. 559)
Unlock the answer
question
investment
answer
n. the use of income today in a way that allows for a future benefi t (p. 318)
Unlock the answer
question
investment objective
answer
n. a financial goal that is used to determine if an investment is appropriate (p. 324)
Unlock the answer
question
junk bond
answer
n. a high-risk, high-yield corporate bond (p. 339)
Unlock the answer
question
Keynesian economics
answer
n. the idea, fi rst advanced by John Maynard Keynes, that the government needs to stimulate aggregate demand in times of recession (p. 454)
Unlock the answer
question
labor
answer
n. all the human time, effort, and talent used to produce goods and services (p. 8)
Unlock the answer
question
labor input
answer
n. the size of the labor force multiplied by the length of the workweek (p. 371)
Unlock the answer
question
labor productivity
answer
n. the amount of goods and services a person can produce in a given time (p. 149)
Unlock the answer
question
labor union
answer
n. an organization of workers that seeks to improve wages, working conditions, fringe benefits, job security, and other work-related matters for its members (p. 274)
Unlock the answer
question
Laffer Curve
answer
n. a graph that illustrates how tax cuts affect tax revenues and economic growth (p. 459)
Unlock the answer
question
lagging indicators
answer
n. measures of economic performance that usually change after real gross domestic product changes (p. 364)
Unlock the answer
question
laissez faire
answer
n. the principle that the government should not interfere in the economy (p. 49)
Unlock the answer
question
land
answer
n. all the natural resources on or under the ground that are used to produce goods and services (p. 8)
Unlock the answer
question
landlord
answer
n. the owner of rental property (p. 609)
Unlock the answer
question
law of comparative advantage
answer
n. the law stating that countries gain when they produce items that they are most efficient at producing and that are at the lowest opportunity cost (p. 514)
Unlock the answer
question
law of demand
answer
n. states that when the price of a good or service goes down, quantity demanded increases, and when the prices go up, quantity demanded falls (p. 99)
Unlock the answer
question
law of diminishing marginal utility
answer
n. states that the marginal benefit from using each additional unit of a good or service during a given time period tends to decline as each is used (p. 106)
Unlock the answer
question
law of increasing opportunity costs
answer
n. states that as production switches from one product to another, increasingly more resources are needed to increase the production of the second product, which causes opportunity costs to rise (p. 21)
Unlock the answer
question
law of supply
answer
n. states that producers are willing to sell more of a good or service at a higher price than they are at a lower price (p. 131)
Unlock the answer
question
leading indicators
answer
n. measures of economic performance that usually change before real gross domestic product changes (p. 364)
Unlock the answer
question
lease
answer
n. a contract for renting an apartment, vehicle, or other item for a specific period of time (p. 609)
Unlock the answer
question
legal equality
answer
n. a situation in which everyone has the same economic rights under the law (p. 73)
Unlock the answer
question
less developed countries (LDCs)
answer
n. countries with lower GDPs, less well-developed industry, and lower standards of living; sometimes called emerging economies (p. 545)
Unlock the answer
question
life expectancy
answer
n. the average number of years a person could expect to live if current mortality trends were to continue for the rest of that person's life (p. 547)
Unlock the answer
question
limited liability
answer
n. a situation in which a business owner's liability for business debts and losses is limited (p. 240)
Unlock the answer
question
limited liability partnership (LLP)
answer
n. a partnership in which all partners are not responsible for the debts and other liabilities of the other partners (p. 233)
Unlock the answer
question
limited life
answer
n. a situation in which a business ceases to exist if the owner dies, retires, or leaves (p. 228)
Unlock the answer
question
limited partnership
answer
n. a partnership in which at least one partner is not involved in running the business and is liable only for the funds he or she invested (p. 233)
Unlock the answer
question
literacy rate
answer
n. the percentage of people older than 15 who can read and write (p. 547)
Unlock the answer
question
loan
answer
n. borrowed money that is usually repaid with interest (p. 582)
Unlock the answer
question
Lorenz curve
answer
n. a curve that shows the degree of income inequality in a nation (p. 391)
Unlock the answer
question
macroeconomic equilibrium
answer
n. the point where aggregate demand equals aggregate supply (p. 361)
Unlock the answer
question
macroeconomics
answer
n. the study of the behavior of the economy as a whole; concerned with large-scale economic activity (p. 27)
Unlock the answer
question
mandatory spending
answer
n. government spending that is required by current law (p. 428)
Unlock the answer
question
marginal benefit
answer
n. the benefit or satisfaction gained from using one more unit of a good or service (p. 16)
Unlock the answer
question
marginal cost
answer
n. the additional cost of producing or using one more unit of a good or service (pp. 16, 140)
Unlock the answer
question
marginal product
answer
n. the change in total output that results from adding one more worker (p. 138)
Unlock the answer
question
marginal revenue
answer
n. the money made from each additional unit sold (p. 142)
Unlock the answer
question
market
answer
n. any place or situation in which people buy and sell goods and services (p. 48)
Unlock the answer
question
market allocation
answer
n. an agreement among or between competing businesses to divide up a market (p. 216)
Unlock the answer
question
market demand curve
answer
n. a graph that shows data from a market demand schedule, or how much of a good or service all consumers are willing and able to purchase at each price (p. 102)
Unlock the answer
question
market demand schedule
answer
n. a table that shows how much of a good or service all consumers are willing and able to purchase at each price in a market (p. 100)
Unlock the answer
question
market economy
answer
n. an economic system based on individual choice and voluntary exchange (p. 39)
Unlock the answer
question
market equilibrium
answer
n. a situation in which the quantity supplied and the quantity demanded at a particular price are equal (p. 164)
Unlock the answer
question
market failure
answer
n. a situation in which people who are not part of a marketplace interaction benefit from it or pay part of its costs (p. 84)
Unlock the answer
question
market research
answer
n. the gathering and evaluation of information about consumer preferences for goods and services (p. 208)
Unlock the answer
question
market share
answer
n. a company's percent of total sales in a particular market (p. 209)
Unlock the answer
question
market structure
answer
n. an economic model of competition among businesses in the same industry (p. 192)
Unlock the answer
question
market supply curve
answer
n. a graph that shows data from a market supply schedule (p. 134)
Unlock the answer
question
market supply schedule
answer
n. how much of a good or service all producers in a market are willing and able to offer for sale at each price (p. 132)
Unlock the answer
question
maturity
answer
n. the date when a bond is due to be repaid (p. 338)
Unlock the answer
question
Medicaid
answer
n. a government-run medical insurance program for low-income people (p. 429)
Unlock the answer
question
Medicare
answer
n. a government-run, national health insurance program mainly for citizens over age 65 (p. 423)
Unlock the answer
question
medium of exchange
answer
n. a means through which goods and services can be exchanged (p. 288)
Unlock the answer
question
merger
answer
n. the combining of two or more companies to form a single company (p. 214)
Unlock the answer
question
microeconomics
answer
n. the study of the behavior of individual players—such as individuals, families, and businesses—in an economy (p. 27)
Unlock the answer
question
minimum balance requirement
answer
n. the amount of money needed in an account to avoid fees (p. 576)
Unlock the answer
question
minimum wage
answer
n. the lowest amount, established by law, that an employer may pay a worker for one hour of work (pp. 182, 262)
Unlock the answer
question
mixed economy
answer
n. an economic system that has elements of traditional, command, and market economies; the most common economic system (p. 58)
Unlock the answer
question
modified free enterprise economy
answer
n. a mixed economic system that includes some government protections, provisions, and regulations to adjust the free enterprise system (p. 80)
Unlock the answer
question
monetarism
answer
n. an economic theory that suggests that rapid changes in the money supply are the main cause of economic instability (p. 496)
Unlock the answer
question
monetary
answer
adj. of or relating to money (p. 474)
Unlock the answer
question
monetary policy
answer
n. the Federal Reserve's actions that change the money supply to infl uence the economy (p. 490)
Unlock the answer
question
money
answer
n. anything that people will accept as payment for goods and services (p. 288)
Unlock the answer
question
money market
answer
n. a market in which short-term financial assets are bought and sold (p. 322)
Unlock the answer
question
monopolistic competition
answer
n. a market structure in which many sellers offer similar, but not standardized, products to consumers (p. 206)
Unlock the answer
question
monopoly
answer
n. a market structure in which only one seller sells a product for which there are no close substitutes (p. 198)
Unlock the answer
question
monopsony
answer
n. market structure in which there are many sellers but only one large buyer (p. 212)
Unlock the answer
question
multifactor productivity
answer
n. the ratio between an industry's economic output and its labor and capital inputs (p. 372)
Unlock the answer
question
multinational corporation
answer
n. a corporation with branches in several countries (p. 243)
Unlock the answer
question
mutual fund
answer
n. an investment company that gathers money from individual investors and uses the money to purchase a range of financial assets (p. 320)
Unlock the answer
question
NAFTA
answer
n. the North America Free Trade Agreement, which ensures free trade throughout the continent and constitutes the largest free-trade zone in the world (p. 533)
Unlock the answer
question
national bank
answer
n. a bank chartered by the national government (p. 299)
Unlock the answer
question
national debt
answer
n. the total amount of money that the federal government owes (p. 462)
Unlock the answer
question
national income (NI)
answer
n. the total income earned in a nation from the production of goods and services in a given time period (p. 355)
Unlock the answer
question
national income accounting
answer
n. a way of analyzing a country's economy using statistical measures of its income, spending, and output (p. 350)
Unlock the answer
question
nationalize
answer
v. to change from private ownership to government or public ownership (p. 61)
Unlock the answer
question
natural monopoly
answer
n. a market situation in which the costs of production are lowest when only one firm supplies a product or service (p. 201)
Unlock the answer
question
near money
answer
n. savings accounts and other similar time deposits that can be converted into cash relatively easily (p. 293)
Unlock the answer
question
needs
answer
n. things such as food, clothing, and shelter that are necessary for survival (p. 4)
Unlock the answer
question
negative externality
answer
n. an externality that costs people who were not involved in the original economic activity (p. 87)
Unlock the answer
question
net national product (NNP)
answer
n. the gross national product minus depreciation of capital stock—in other words, the value of final goods and services less the value of capital goods that became worn out during the year (p. 355)
Unlock the answer
question
nominal GDP
answer
n. the gross domestic product stated in terms of the current value of goods and services (p. 352)
Unlock the answer
question
nonmarket activities
answer
n. services that have potential economic value but are performed without charge (p. 354)
Unlock the answer
question
nonprice competition
answer
n. the use of factors other than price—such as style, service, advertising, or giveaways—to try to convince customers to buy from one producer rather than another (p. 207)
Unlock the answer
question
nonprofit organization
answer
n. an institution that acts like a business but exists to benefit society rather than to make a profit (p. 250)
Unlock the answer
question
normal goods
answer
n. goods that consumers demand more of when their incomes rise (p. 110)
Unlock the answer
question
normative economics
answer
n. a way of describing and explaining what economic behavior ought to be, not what it actually is (p. 29)
Unlock the answer
question
oligopoly
answer
n. a market structure in which only a few sellers offer a similar product (p. 209)
Unlock the answer
question
OPEC
answer
n. the Organization of Petroleum Exporting Countries, a regional trade group (p. 535)
Unlock the answer
question
open market operations
answer
n. the Federal Reserve's sale and purchase of federal government securities; the monetary policy tool most used by the Federal Reserve to adjust the money supply (p. 490)
Unlock the answer
question
open opportunity
answer
n. the ability of everyone to enter and compete in the market of his or her own free choice (p. 73)
Unlock the answer
question
operating budget
answer
n. a plan for day-to-day expenses (p. 436)
Unlock the answer
question
opportunity cost
answer
n. the value of something that is given up by choosing one alternative over another (p. 14)
Unlock the answer
question
option
answer
n. a contract giving an investor the right to buy or sell stock at a future date at a preset price (p. 333)
Unlock the answer
question
outsourcing
answer
n. the practice of contracting with an outside company, often in a foreign country, to provide goods or services (p. 269)
Unlock the answer
question
overdraft
answer
n. a check or other withdrawal that exceeds the existing account balance (p. 576)
Unlock the answer
question
par value
answer
n. the amount that a bond issuer promises to pay the buyer at maturity (p. 338)
Unlock the answer
question
partnership
answer
n. a business co-owned by two or more people, or "partners," who agree on how responsibilities, profi ts, and losses should be divided (p. 232)
Unlock the answer
question
patent
answer
n. a legal registration of an invention or a process that gives the inventor the exclusive property rights to that invention or process for a certain number of years (p. 202)
Unlock the answer
question
peak
answer
n. the end of an expansion in the economy (p. 359)
Unlock the answer
question
per capita gross domestic product
answer
n. a nation's GDP divided by its total population (p. 546)
Unlock the answer
question
perestroika
answer
n. Russian leader Mikhail Gorbachev's plan to gradually incorporate markets into the Soviet Union's command economy (p. 564)
Unlock the answer
question
perfect competition
answer
n. the ideal model of a market economy; the market structure in which none of the many well-informed and independent sellers or buyers has control over the price of a standardized good or service (p. 192)
Unlock the answer
question
personal income (PI)
answer
n. the annual income received by a country's people from all sources (p. 355)
Unlock the answer
question
phishing
answer
n. technique used by identity thieves to gather personal information through deceptive telephone calls (p. 588)
Unlock the answer
question
PIN
answer
n. personal identification number (p. 577)
Unlock the answer
question
positive economics
answer
n. a way of describing and explaining economics as it is (p. 29)
Unlock the answer
question
positive externality
answer
n. an externality that benefits people who were not involved in the original economic activity (p. 87)
Unlock the answer
question
poverty
answer
n. the situation in which a person's income and resources do not allow him or her to achieve a minimum standard of living (p. 388)
Unlock the answer
question
poverty rate
answer
n. the percentage of people living in households that have incomes below the poverty threshold (p. 389)
Unlock the answer
question
poverty threshold
answer
n. the offi cial minimum income needed to pay for the basic expenses of living (p. 388)
Unlock the answer
question
predatory pricing
answer
n. the setting of prices below cost for a time to drive smaller competitors out of a market (p. 216)
Unlock the answer
question
preferred stock
answer
n. a share of ownership in a corporation giving the holder a share of profits but, in general, no voting rights (p. 331)
Unlock the answer
question
premium
answer
n. an amount paid for insurance (p. 596)
Unlock the answer
question
price ceiling
answer
n. an established maximum price that sellers may charge for a product (p. 180)
Unlock the answer
question
price fixing
answer
n. conspiring among or between businesses to set the prices of competing products (p. 216)
Unlock the answer
question
price floor
answer
n. an established minimum price that buyers must pay for a product (p. 182)
Unlock the answer
question
price maker
answer
n. a business that does not have to consider competitors when setting its prices (p. 198)
Unlock the answer
question
price taker
answer
n. a firm that must accept the market price set by the interaction of supply and demand (p. 193)
Unlock the answer
question
primary market
answer
n. a market for buying newly created financial assets directly from the issuing entity (p. 322)
Unlock the answer
question
prime rate
answer
n. the interest rate that banks charge their best customers (p. 491)
Unlock the answer
question
private company
answer
n. a corporation that controls who can buy or sell its stock (p. 238)
Unlock the answer
question
private property rights
answer
n. the rights of individuals and groups to own resources and businesses (p. 48)
Unlock the answer
question
private sector
answer
n. the part of the economy that is owned by individuals or businesses (p. 432)
Unlock the answer
question
privatization
answer
n. the process of transferring state-owned property and businesses to individuals (p. 563)
Unlock the answer
question
privatize
answer
v. to change from government or public ownership to private ownership (p. 61)
Unlock the answer
question
producer
answer
n. a person who makes goods or provides services (p. 5)
Unlock the answer
question
producer price index (PPI)
answer
n. a measure of changes in wholesale prices (p. 397)
Unlock the answer
question
product differentiation
answer
n. the attempt to distinguish a product from similar products (p. 206)
Unlock the answer
question
product market
answer
n. the market in which goods and services are bought and sold (p. 52)
Unlock the answer
question
production possibilities curve (PPC)
answer
n. a graph used to illustrate the impact of scarcity on an economy (p. 18)
Unlock the answer
question
productivity
answer
n. the amount of output produced from a set amount of inputs (p. 372)
Unlock the answer
question
profit
answer
n. the financial gain a seller makes from a business transaction (p. 49); the money left over after the costs of producing a product are subtracted from the income gained by selling that product (p. 78)
Unlock the answer
question
profit-maximizing output
answer
n. the point in production at which a business has reached its highest level of profit (p. 143)
Unlock the answer
question
profit motive
answer
n. the incentive that encourages people and organizations to improve their material well-being by seeking to gain from economic activities (p. 73)
Unlock the answer
question
progressive tax
answer
n. a tax that places a higher percentage rate of taxation on high-income earners than on low-income earners (p. 412)
Unlock the answer
question
property tax
answer
n. a tax based on the value of an individual's or a business's assets (p. 412)
Unlock the answer
question
proportional tax
answer
n. a tax that takes the same percentage of income from all taxpayers regardless of income level (p. 412)
Unlock the answer
question
protectionism
answer
n. the use of trade barriers between nations to protect domestic industries (p. 523)
Unlock the answer
question
protective tariff
answer
n. a tax on imported goods to protect domestic goods (p. 521)
Unlock the answer
question
public company
answer
n. a corporation that issues stock that can be freely traded (p. 238)
Unlock the answer
question
public disclosure
answer
n. a policy requiring businesses to reveal product information to consumers (p. 217)
Unlock the answer
question
public goods
answer
n. goods and services provided by the government and consumed by the public as a group (p. 84)
Unlock the answer
question
public transfer payment
answer
n. a transfer payment in which the government transfers income from taxpayers to recipients who do not provide anything in return (p. 89)
Unlock the answer
question
quota
answer
n. a limit on the amount of a product that can be imported (p. 520)
Unlock the answer
question
rational expectations theory
answer
n. the theory that states that individuals and business firms expect changes in fiscal policy will have particular effects and take action to protect their interests against those effects (p. 452)
Unlock the answer
question
rationing
answer
n. a system in which the government allocates goods and services using factors other than price (p. 183)
Unlock the answer
question
real GDP
answer
n. the gross domestic product corrected for changes in prices from year to year (p. 352)
Unlock the answer
question
real GDP per capita
answer
n. the real gross domestic product divided by total population (p. 369)
Unlock the answer
question
recession
answer
n. a prolonged economic contraction lasting two or more quarters (six months or more) (p. 359)
Unlock the answer
question
regressive tax
answer
n. a tax that takes a larger percentage of income from low-income earners than from high-income earners (p. 412)
Unlock the answer
question
regulation
answer
n. a set of rules or laws designed to control business behavior (pp. 150, 214)
Unlock the answer
question
representative money
answer
n. paper money that is backed by something tangible (p. 291)
Unlock the answer
question
required reserve ratio (RRR)
answer
n. the fraction of a bank's deposits, determined by the Federal Reserve, that it must keep in reserve so that it can loan out money (p. 484)
Unlock the answer
question
return
answer
n. the profit or loss made on an investment (p. 327)
Unlock the answer
question
revenue
answer
n. government income from taxes and nontax sources (p. 410)
Unlock the answer
question
revenue tariff
answer
n. a tax on imports specifi cally to raise money; are rarely used today (p. 521)
Unlock the answer
question
right-to-work laws
answer
n. legislation that makes it illegal to require workers to join unions (p. 279)
Unlock the answer
question
risk
answer
n. the possibility for loss on an investment (p. 327)
Unlock the answer
question
safety net
answer
n. government programs designed to protect people from economic hardships (p. 89)
Unlock the answer
question
sales tax
answer
n. a tax based on the value of goods or services at the time of sale (p. 412)
Unlock the answer
question
savings
answer
n. income not used for consumption (p. 318)
Unlock the answer
question
scarcity
answer
n. a situation that exists when there are not enough resources to meet human wants (p. 4)
Unlock the answer
question
seasonal unemployment
answer
n. unemployment linked to seasonal work (p. 384)
Unlock the answer
question
secondary market
answer
n. a market in which fi nancial assets are resold (p. 322)
Unlock the answer
question
service
answer
n. work that one person does for another for payment (p. 5)
Unlock the answer
question
share
answer
n. part of the stock of a corporation (p. 238); see stock
Unlock the answer
question
shock therapy
answer
n. an economic program involving the abrupt shift from a command economy to a free-market economy (p. 563)
Unlock the answer
question
shortage
answer
n. a situation in which demand is greater than supply, usually the result of prices being set too low (p. 167)
Unlock the answer
question
shoulder surfing
answer
n. technique used by identity thieves to gather personal information as you disclose private information in public (p. 588)
Unlock the answer
question
socialism
answer
n. an economic system in which the government owns some or all of the factors of production (p. 43)
Unlock the answer
question
Social Security
answer
n. a federal program to aid older citizens, orphaned children, and the disabled (p. 423)
Unlock the answer
question
sole proprietorship
answer
n. a business owned and controlled by one person (p. 226)
Unlock the answer
question
spamming
answer
n. technique used by identity thieves to gather personal information through deceptive e-mails (p. 588)
Unlock the answer
question
special economic zone (SEZ)
answer
n. a geographic region that has economic laws that are different from a country's usual economic laws, with the goal of increasing foreign investment (p. 567)
Unlock the answer
question
specialization
answer
n. a situation that occurs when individuals or businesses concentrate their efforts in the areas in which they have an advantage for increased productivity and profit (pp. 50, 138, 510)
Unlock the answer
question
spending multiplier effect
answer
n. a situation in which a small change in spending eventually results in a much larger change in GDP (p. 455)
Unlock the answer
question
stabilization programs
answer
n. programs that require troubled nations to carry out reforms such as reducing foreign trade deficits and external debt, eliminating price controls, closing inefficient public enterprises, and slashing budget deficits (p. 559)
Unlock the answer
question
stagflation
answer
n. a period during which prices rise at the same time that there is a slowdown in business activity (p. 359)
Unlock the answer
question
standardized product
answer
n. a product that consumers consider identical in all essential features to other products in the same market (p. 192)
Unlock the answer
question
standard of value
answer
n. the yardstick of economic worth in the exchange process (p. 289)
Unlock the answer
question
start-up costs
answer
n. the expenses that a new business must pay to enter a market and begin selling to consumers (p. 209)
Unlock the answer
question
state bank
answer
n. a bank chartered by a state government (p. 296)
Unlock the answer
question
statistics
answer
n. numerical data (p. 24)
Unlock the answer
question
stock
answer
n. shares of ownership in a corporation (p. 238)
Unlock the answer
question
stockbroker
answer
n. an agent who buys and sells securities for customers (p. 332)
Unlock the answer
question
stock exchange
answer
n. a secondary market where securities are bought and sold (p. 330)
Unlock the answer
question
stock index
answer
n. an instrument used to measure and report the change in prices of a set of stocks (p. 334)
Unlock the answer
question
stored-value card
answer
n. a card that represents money that the card holder has on deposit with the card issuer (p. 308)
Unlock the answer
question
store of value
answer
n. something that holds its value over time (p. 289)
Unlock the answer
question
strike
answer
n. a work stoppage used to gain negotiating power while attempting to convince an employer to improve wages, working conditions, or other work-related matters (p. 274)
Unlock the answer
question
structural unemployment
answer
n. unemployment that exists when the available jobs do not match the skills of available workers (p. 384)
Unlock the answer
question
subsidy
answer
n. a government payment that helps cover the cost of an economic activity that can benefit the public as a whole (p. 88)
Unlock the answer
question
substitutes
answer
n. products that can be used in place of other products to satisfy consumer wants (p. 112)
Unlock the answer
question
substitution effect
answer
n. the pattern of behavior that occurs when consumers react to a change in price of a product by buying a substitute product that offers a better relative value (p. 107)
Unlock the answer
question
supply
answer
n. the willingness and ability of a producer to produce and sell a product (p. 130)
Unlock the answer
question
supply curve
answer
n. a graph that shows data from a supply schedule (p. 134)
Unlock the answer
question
supply schedule
answer
n. a table that shows how much of a good or service an individual producer is willing and able to offer for sale at each price (p. 132)
Unlock the answer
question
supply-side fiscal policy
answer
n. a plan designed to provide incentives to producers to increase aggregate supply (p. 458)
Unlock the answer
question
surplus
answer
n. a situation in which supply is greater than demand, usually the result of prices being set too high (p. 167)
Unlock the answer
question
tariff
answer
n. a fee charged for goods brought into a country from another country (p. 521)
Unlock the answer
question
tax
answer
n. a mandatory payment to a government (p. 410)
Unlock the answer
question
taxable income
answer
n. the portion of income subject to taxation after all deductions and exemptions (pp. 421, 604)
Unlock the answer
question
tax assessor
answer
n. a government offi cial who determines the value of property to be taxed (p. 437)
Unlock the answer
question
tax base
answer
n. a form of wealth—such as income, property, goods, or services—that is subject to taxes (p. 412)
Unlock the answer
question
tax incentive
answer
n. the use of taxes to encourage or discourage certain economic behaviors (p. 417)
Unlock the answer
question
tax return
answer
n. a form used to report income and taxes owed to the government (p. 421)
Unlock the answer
question
technological monopoly
answer
n. a monopoly that exists because a firm controls a manufacturing method, invention, or type of technology (p. 201)
Unlock the answer
question
technology
answer
n. the application of scientific methods and innovations to production (p. 149)
Unlock the answer
question
telecommuting
answer
n. the practice of doing office work in a location other than the offi ce (p. 270)
Unlock the answer
question
thrift institution
answer
n. a fi nancial institution that serves savers (p. 478)
Unlock the answer
question
total cost
answer
n. the sum of fixed and variable costs (p. 140)
Unlock the answer
question
total revenue
answer
n. the income a business receives from selling its products (pp. 122, 142)
Unlock the answer
question
total revenue test
answer
n. a method of measuring elasticity by comparing the total revenue a business would receive when offering its product at various prices (p. 122)
Unlock the answer
question
trade barrier
answer
n. any law passed to limit free trade between nations (p. 520)
Unlock the answer
question
trade deficit
answer
n. an unfavorable balance of trade that occurs when a nation imports more than it exports (p. 529)
Unlock the answer
question
trade-off
answer
n. the alternative someone gives up when making an economic choice (p. 14)
Unlock the answer
question
trade surplus
answer
n. a favorable balance of trade that occurs when a nation exports more than it imports (p. 529)
Unlock the answer
question
trade war
answer
n. a succession of trade barriers between nations (p. 522)
Unlock the answer
question
trade-weighted value of the dollar
answer
n. a measure of the international value of the dollar that determines if the dollar is strong or weak as measured against another currency (p. 528)
Unlock the answer
question
traditional economy
answer
n. an economic system in which people make economic decisions based on customs and beliefs that have been handed down from one generation to the next (p. 38)
Unlock the answer
question
transfer payment
answer
n. money distributed to individuals who do not provide goods or services in return (pp. 89, 432)
Unlock the answer
question
transitional economy
answer
n. a country that has moved (or is moving) from a command economy to a market economy (p. 545)
Unlock the answer
question
Treasury bill (T bill)
answer
n. a short-term bond that matures in less than one year (p. 464)
Unlock the answer
question
Treasury bond
answer
n. a long-term bond that matures in 30 years (p. 464)
Unlock the answer
question
Treasury note
answer
n. an intermediate-term bond that matures in between two and ten years (p. 464)
Unlock the answer
question
trough
answer
n. the end of a contraction in the economy (p. 359)
Unlock the answer
question
trust
answer
n. a group of fi rms combined in order to reduce competition in an industry (p. 214)
Unlock the answer
question
trust fund
answer
n. a fund held for a specifi c purpose to be expended at a future date (p. 465)
Unlock the answer
question
underemployed
answer
n. people employed part-time who want to work full-time, or those who work at a job below their skill level (p. 383)
Unlock the answer
question
underground economy
answer
n. market activities that go unreported because they are illegal or because those involved want to avoid taxation (p. 354)
Unlock the answer
question
underutilization
answer
n. the condition in which economic resources are not being used to their full potential, resulting in fewer goods and services (p. 20)
Unlock the answer
question
unemployment rate
answer
n. the percentage of the labor force that is jobless and actively looking for work (p. 382)
Unlock the answer
question
union shop
answer
n. a business in which workers are required to join a union within a set time period after being hired (p. 279)
Unlock the answer
question
unit elastic
answer
adj. relating to a situation in which the percentage change in price and quantity demanded are the same (p. 118)
Unlock the answer
question
unlimited liability
answer
n. a situation in which a business owner is responsible for all the losses and debts of a business (p. 228)
Unlock the answer
question
unlimited life
answer
n. a situation in which a corporation continues to exist even after a change in ownership (p. 240)
Unlock the answer
question
user fee
answer
n. money charged for the use of a good or service (p. 425)
Unlock the answer
question
utility
answer
n. the benefi t or satisfaction gained from using a good or service (p. 12)
Unlock the answer
question
variable costs
answer
n. business costs that vary with the level of production output (p. 140)
Unlock the answer
question
vertical merger
answer
n. the combining of two or more businesses involved in different steps of producing or marketing a product or service (p. 243)
Unlock the answer
question
voluntary exchange
answer
n. a trade in which the parties involved anticipate that the benefits will outweigh the cost (p. 49)
Unlock the answer
question
voluntary export restraint (VER)
answer
n. a self-imposed limit on exports to certain countries to avoid quotas or tariffs (p. 521)
Unlock the answer
question
wage and price controls
answer
n. government limits on increases in wages and prices (p. 501)
Unlock the answer
question
wage-price spiral
answer
n. a cycle that begins with increased wages, which lead to higher production costs, which in turn result in higher prices, which result in demands for even higher wages (p. 400)
Unlock the answer
question
wage rate
answer
n. the established rate of pay for a specific job or work performed (p. 261)
Unlock the answer
question
wages
answer
n. the payments workers receive in return for work (p. 258)
Unlock the answer
question
wants
answer
n. desires that can be satisfi ed by consuming a good or service (p. 4)
Unlock the answer
question
welfare
answer
n. government economic and social programs that provide assistance to the needy (p. 392)
Unlock the answer
question
withholding
answer
n. the money taken from a worker's pay before the worker receives the pay (p. 421)
Unlock the answer
question
workfare
answer
n. a program that requires welfare recipients to do some kind of work in return for their benefits (p. 393)
Unlock the answer
question
World Bank
answer
n. a financial institution that provides loans, policy advice, and technical assistance to low and middle income countries to reduce poverty (p. 559)
Unlock the answer
question
World Trade Organization (WTO)
answer
n. an organization that negotiates and administers trade agreements, resolves trade disputes, monitors trading policies, and supports developing countries (p. 535)
Unlock the answer
question
yield
answer
n. the annual rate of return on a bond (p. 338)
Unlock the answer
