Chapter 3 Economics Flashcards
Balanced budget
Situation in which total revenues raised by taxes equal the total proposed for the spending year.
Budget
Organization’s plan for how it will raise and spend money during a given period of time.
Budget deficit
Situation in which the government spends more than the amount of money it raises through taxes.
Budget surplus
Excess funding that occurs when government spends less than the amount of funds raised through taxes and fees
Communism
Economic system in which all property would be shared equally by the people of a community under the direction of a string central government
Consumer price index (CPI)
Measurement of the month average change in prices of goods services
Core inflation rate
Inflation rate of an economy after energy and food prices removed.
Cyclical unemployment.
Deflation
Opposite of inflation, occurs when prices continue to fall
Demand
Willingness and ability of buyers to purchase goods and services.
Demand curve
Graph of the amount of a product that buyers will purchase at different prices.
Economics
Social science that analyzes the choices people and governments make in allocating scarce resources,
Equilibrium price
Prevailing market price at which you can buy an item.
Expansionary monetary policy
Government actions to increase the money supply in an effort to act the cost of borrowing, which encourages business decision makers to make new investments, in turn stimulating employment and economic growth
Fiscal policy
Government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general welfare of citizens, and encourage economic growth
Frictional unemployment
Applies to members of the workforce who are temporarily not working but are looking for jobs.
Gross domestic product (GDP)
Sum of all goods and services produced within a country’s boundaries during a specific time period, such as a year.
Hyper inflation
Economic situation characterized by soaring prices.
Inflation
Economic situation characterized by rising prices caused bya combination of excess consumer demand and increases in the costs raw materials, component parts, human resources, and other factors of production.
Macroeconomics
Study of a nation’s overall economic issues, such as how an economy maintains and allocates resources and how a goverment’s policies affect the standards of living of its citizens.
Microeconomics
Study of small economic units, such as individual consumers, families, and businesses.
Mixed market economics
Economic system that draws from both types of economies, to different degrees.
Monetary policy
Government actions to increase or decrease the money supply and change banking requirements and interest rates to influence bankers’ willingness to make loans.
Monopolistic competition
Market structure in which large numbers of f buyers and sellers exchange heterogenous products so each participant has some control over price.