Chapter 2 Slideshow Vocab

Question 1

Economics

Answer 1

The study of how society employs resources to produce goods and services for consumption among various groups of individuals.

Question 2

Macroeconomics

Answer 2

Concentrates on the operation of a nation’s economy as a whole.

Question 3

Microeconomics

Answer 3

Concentrates on the behavior of people and organizations in markets for particular products or services.

Question 4

Resource Development

Answer 4

The study of how to increase resources and create conditions that will make better use of them.

Question 5

Capitalism

Answer 5

All or most of the land, factories and stores are owned by individuals, not the government, and operated for profit.

Question 6

State Capitalism

Answer 6

When the state, rather than private owners, run some businesses.

Question 7

Free market

Answer 7

Decisions about what and how much to produce are made by the market.

Question 8

Supply

Answer 8

The quantities of products businesses are willing to sell at different prices.

Question 9

Demand

Answer 9

The quantities of products consumers are willing to buy at different prices.

Question 10

Market price (equilibrium point)

Answer 10

Determined by supply and demand, this is the negotiated price.

Question 11

Socialism

Answer 11

An economic system based on the premise that some basic businesses, like utilities, should be owned by the government in order to more evenly distribute profits among the people.

Question 12

Communism

Answer 12

An economic and political system which the government makes all economic decisions and owns almost all the major factors of production.

Question 13

Free-Market Economies

Answer 13

The market largely determines what goods and services are produced, who gets them, and how the economy grows.

Question 14

Command Economies

Answer 14

The government largely determines what goods and services are produced, who gets them, and how the economy will grow.

Question 15

Mixed Economies

Answer 15

Some allocation of resources is made by the market and some by the government.

Question 16

Gross Domestic Product

Answer 16

Total value of final goods and services produced in a country in a given year. As long as a company is within a country’s border, their numbers go into the country’s GDP (even if they are foreign-owned).

Question 17

Gross Output

Answer 17

A measure of total sales volume at all stages of production.

Question 18

Inflation

Answer 18

The general rise in the prices of goods and services over time.

Question 19

Disinflation

Answer 19

When the price increases are slowing (inflation rate declining)

Question 20

Deflation

Answer 20

Prices are declining because too few are chasing too many goods

Question 21

Stagflation

Answer 21

Economy is slowing, but prices are going up.

Question 22

Consumer Price Index

Answer 22

Monthly statistics that measure the pace of inflation or deflation.

Question 23

Business Cycles

Answer 23

Periodic rises and falls that occur in economies over time.

Question 24

Fiscal Policy

Answer 24

The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending.

Question 25

Monetary Policy

Answer 25

The management of the many supply and interest rates by the Federal Reserve Bank.

Question 26

National Deficit

Answer 26

The amount of money the federal government spends beyond what it gathers in taxes.

Question 27

National Debt

Answer 27

The sum of government deficits over time.

Question 28

National Surplus

Answer 28

When government takes in more than it spends.