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Definition
| Causes prices to rise (dollar will buy fewer goods (Fed can slow down spending by raising interest rates & taxes) |
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| Law of Diminishing Returns |
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Definition
| Rule that states after a certain point in production, profit will begin to decrease |
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Term
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Definition
| Problem that exists because we can't satisfy all the wants of all the people (causes prices to rise) |
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Term
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Definition
| The value you place on what you gave up to make your 1st choice |
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Definition
| Example of this is the income you would give up by going to college for 4 years instead of working |
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Term
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Definition
| Part of the business cycle that is defined by 2 straight quarters (at least 6 months) of declining GDP |
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Definition
| The ups and downs of the economy |
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Definition
| The difference between these 2 economic situations can be seen by the severity in the contraction |
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Term
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Definition
| This describes the fact that people who invest in corporations are only responsible for the amount they invested |
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Definition
| Term that describes how sole proprietors and partners are responsible for all debts of the business |
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Definition
| Laws that protect competition by prohibiting monopolies (companies can't merge if it will cause a monopoly) |
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Term
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Definition
| Amount the Federal Reserve requires banks to keep on hand |
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Term
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Definition
| This helps to improve worker output & increases productivity |
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Term
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Definition
| The effect a drought would have on prices of crops |
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Term
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Definition
| Costs that remain every month |
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Term
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Definition
| Phase of the business cycle when the economy is on the rise & businesses are investing |
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Term
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Definition
| Part of the government that can help inflation by decreasing the money supply (increase interest rates) |
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Term
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Definition
| People who take a risk by opening a business in hopes of making a profit (most important factor of production) |
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Term
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Definition
| Tax on certain goods (alcohol, tobacco, luxury items) |
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Term
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Definition
| This is the currency typically used for trade because it has a fairly stable value |
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Term
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Definition
| When a country or company can produce a good cheaper than someone else (Ex.: Middle East- oil, Canada- timber) |
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Term
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Definition
| Table that shows how the demand curve will shift to the left when it decreases & to the right when it increases) |
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Term
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Definition
| Type of economy in which decisions are made by the consumer (type U.S. has) |
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Term
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Definition
| Type of economy in which government planners make all the decisions & own all of the resources |
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Term
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Definition
| Things the government offers to encourage certain behavior (Ex.: tax breaks, subsidies) |
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Term
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Definition
| This is how the government can encourage people to spend more money |
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Term
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Definition
| The point at which supply and demand curves intersect on a graph |
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Term
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Definition
| Description of the stock market when prices are expected to rise |
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Term
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Definition
| Description of the stock market when prices are expected to fall |
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Term
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Definition
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Term
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Definition
| The minimum amount of something (Ex. would be the minimum wage) |
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Term
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Definition
| Type of loan that would not be affected by inflation |
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Term
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Definition
| Exchanging money for goods |
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Term
| Decrease the money supply |
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Definition
| How the government would respond to inflation (increase or decrease money supply) |
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Term
| So they can pay depositers |
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Definition
| This is why the Fed requires banks to keep a certain amount of cash on hand (cash reserves) |
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Term
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Definition
| Unlimited wants, limited resources |
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Term
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Definition
| The opportunity that you forfeited to choose something else |
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Term
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Definition
| Some of these are legal because they are the only ones to provide a service/product at a low cost |
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Term
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Definition
| The most important factor of production because they create jobs |
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Term
| Supply and demand & the Market |
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Definition
| This is what determines prices in a free enterprise/market economy |
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Term
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Definition
| When the government uses funds to pay for 1 service instead of another, this is what it's called |
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Term
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Definition
| Banking is an example of this type of industry (doing something for consumers, rather than producing a product) |
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Term
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Definition
| This type of business involves stocks, dividends (more regulations, less liability) |
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Term
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Definition
| Type of tax that increases as you make more (income tax is an example) |
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Term
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Definition
| Type of tax that is the same % for everyone, regardless of income (sales tax is an example) |
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Term
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Definition
| Good used to produce another good |
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Term
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Definition
| A worker in an assembly line is an example of this |
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Term
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Definition
| The type of economy where bartering would take place |
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Term
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Definition
| How the U.S. economy is measured (add final value of all goods & services) |
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Term
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Definition
| Not enough of something- causes prices to rise |
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Term
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Definition
| What the result would be if OPEC increased the production of gas |
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Term
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Definition
| How a corporation would raise money |
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Term
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Definition
| When the government spends more money than it collects |
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Term
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Definition
| When 2 companies join (can cause monopolistic practices) |
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Term
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Definition
| Robotics can cause the need for this to decrease |
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Term
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Definition
| These types of accounts are used to store value |
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Term
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Definition
| The motivating factor of businesses |
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Term
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Definition
| Trade is an example of this |
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Term
| Supply usually exceeds demand |
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Definition
| This is why a slowdown usually follows a peak |
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