Key terms Flashcards
Fundamental Economic problem
The issue of scarcity and how best to produce and distribute these scarce resources
Economic activity
The activity of making, providing, purchasing, or selling goods or services
Scarcity
Limited quantities of resources to meet unlimited wants
Opportunity costs
The cost of missing out on the next best alternative
Inflation
A general and sustained increase in price over time
Interest rates
The cost of borrowing money or the amount a saver receives in interest (percentage of the amount you borrow or save over a year)
Unemployment rates
The percentage of the labour force without a job
Economic growth
An increase in the production and consumption of goods and services in an economy over time
What does GDP stand for?
Gross domestic product
GDP
Total market value of all goods and services produced within a country in a given period of time
Real GDP
The value of output produced in an economy in a period of time adjusted by fixing the currency value (eliminating distortion caused by inflation/deflation)
Budget deficit
When government spending is greater than tax revenues
Budget surplus
When government tax revenue is more than government spending
National debt
The total amount of money that a country owes its creditors
Trade deficit
When the values of imports are greater than the value of exports
