Chapter one Flashcards
Exploring the World of Business and Economics
business
The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs
business cycle
The recurrence of periods of growth and recession in a nation’s economic activity
capitalism
An economic system in which individuals own and operate the majority of businesses that provide goods and services
command economy
An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production
consumer price index
a monthly index that measures the change in prices of a fixed basket of goods purchased by a typical consumer in an urban area
depression
a severe recession that lasts longer than a typical recession and has a larger decline in business activity compared to a recession
e-business
the organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society’s needs through the facilities available online
economy
the way in which people deal with the creation and distribution of wealth
entrepenuer
a person who risks time, effort, and money for to start and operate a business
factors of production
inputs and resources used to produce goods and services
fiscal policies
government influence on the amount of saving and expenditures; accomplished by altering the tax sturcture and by changing the levels of government spending
gross domestic product (gdp)
the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period
invisible hand
describes how an individuals own personal gain benefits others and a nation’s economy
who created the term invisible hand
Adam smith
mixed economy
an economy that exhibits elements of both capitalism and socialism
