Economics vocabulary Flashcards
Barter
The swapping/exchanging of goods and services
Biodiversity
Plant/animal variety in a habitat
Business Cycle
Cyclical fluctuations in the level of economic activity
Consumption
Purchasing goods/services to satisfy needs/wants
Corporate social responsibility
When businesses consider the interests of stakeholders, society and the environment when making business decisions
Depression
A severe contraction in economic activity, results in business failure, unemployment and falling prices.
Economy
All activities undertaken for the purpose of production, distribution and consumption of goods/services within a region/country
Exports
Goods/services sold from local businesses to overseas consumers
Fiscal policy
Th use of the Federal government’s budget to control the economic cycle
Globalisation
The process of people/goods/money/ideas moving around the world faster and more cheaply
Global sourcing
Seeking out the cheapest materials and supplies internationally as if there was only 1 large market
Imports
Goods/services bought by local consumers from overseas businesses
Inflation
A general rise in prices across all economy sectors - money loses its value
Innovation
Adding a new product or improving an existing product/process in a product line
Interdependence
A joint dependence between participants in the economy - the reliance of consumers/businesses/financial institutions/governments on each other
Interest
The price of having money belonging to someone else
Labour market
The buying and selling of employees’ labour
Investment
Using money to buy equipment/premises to establish/expand a business
Law of Supply
States that the quantity supplied of a good/service varies directly with price
Law of demand
States that the quantity demanded of a good/service varies inversely to price
Market
Where the exchange of goods and services between buyers and sellers takes place
Market equilibrium
The point where the supply and demand curves intersect
Monetary policy
The reserve bank using interest rates to control the economic cycle
Price mechanism
The interaction of demand and supply forces that determine the price of a good/service
Production
The creation of goods/services
Recession
2 consecutive quarters of negative economic growth, relatively mild compared to a depression - results in reduced spending, unemployment and slow economic growth
Saving
Regularly putting aside money for the future
