Chapter 2 Flashcards
Economics
The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
Capitalism
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
Free market
Decisions about what and how much to produce are made by the market.
Supply
The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.
Demand
The quantity of products that people are willing to buy at different prices at a specific time.
Socialism
An economic system is based on the premise that some, if not most, basic business should be owned by the government so that profits can be more evenly distributed.
Communism
An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production.
Mixed economics
Economic systems in which some allocation of resources is made by the market and some allocations are made by the government.
Gross domestic product
The total value of final goods and services produced in a country in a given year.
Unemployed Rate
The number of civilians at least 16 years old who are unemployed and have actively tried to find a job within the prior four weeks.
Inflation
A general rise in the prices of goods and services over time.
Business Cycle
The periodic rises and falls that occur in economies over a period of time.
Fiscal policy
The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending.
National Deficit
The amount of money the federal government spends beyond what it collects in taxes for a given fiscal year.
National Debt
The sum of government deficits over time.
