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.
Monopoly
Market situation in which a single seller dominates trade in a good or service for which buyers can find no close substitutes.
National debt
Money owed by government to individuals, businesses, and government agencies who purchase treasury bills, treasury notes, and treasury bonds sold to cover expenditures.
Oligopoly
Market structure in which relatively few sellers compete and high start-up costs form barriers to keep out new competitors.
Planned economy
Economic system in which government controls determine business ownership, profits, and resolve allocation to accomplish government goals rather than those set by individual firms.
Privatization
Conversion of government-owned and operated companies into privately held businesses.
Productivity
Relationship between the number of units produced and the number of human and other production inputs necessary to produce them.
Pure competition
Market structure, in which large numbers of buyers and sellers exchange homogeneous products and no single participant has a significant influence on price.
Recession
Cyclical economic contraction that lasts for six months or longer.
Regulated monopolies
Market situation in which local, state, or federal government grants exclusive rights in a certain market to a single firm.
Restrictive monetary policy
Government actions to reduce the money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth
Seasonal unemployment
Joblessness of workers in a seasonal industry.
Socialism
Economic system characterized by government ownership and operation of major industries such as communications.
Structural unemployment
People who remain unemployed for long periods of time, often with little hope of finding new jobs like their old ones.
Supply
Willingness and ability of sellers to provide goods and services.
Supply curve
Graph that shows the relationship between different prices and the quantities sellers will offer for sale, regardless of demand.
Unemployment rate
Percentage of the total workforce actively seeking work but currently unemployed
