BUSN ch 2 Flashcards
A financial and social system of how resources flow through society, from production, to distribution, to consumption.
economy
The study of the choices that people, companies, and governments make in allocating society’s resources.
economics
The study of a country’s overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies.
macro-economics
The study of smaller economic units such as individual consumers, families, and individual businesses.
micro-economics
Government efforts to influence the economy through taxation and spending.
fiscal policy
Overage that occurs when revenue is higher than expenses over a given period of time.
budget surplus
Shortfall that occurs when expenses are higher than revenue over a given period of time.
budget deficit
The sum of all the money that the federal government has borrowed over the years and not yet repaid.
federal debt
Federal Reserve decisions that shape the economy by influencing interest rates and the supply of money.
monetary policy
Privately owned financial institutions that accept demand deposits and make loans and provide other services for the public.
commercial banks
The total amount of money within the overall economy.
money supply
Anything generally accepted as a medium of exchange, a measure of value, or a means of payment.
money
Includes all currency plus checking accounts and traveler’s checks.
M1 money supply
Includes all of M1 money supply plus most savings accounts, money market accounts, and certificates of deposit.
M2 money supply
The federal Reserve function of buying and selling government securities, which include treasury bonds, notes, and bills.
open market operations
