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Intro to Business > midterm - chapter 2 > Flashcards

midterm - chapter 2 Flashcards

1
Q

What are some effects of inflation?

A
  • workers have to earn more money to maintain some standard of living
  • effects people of fixed income the most
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2
Q

What is a cause of deflation?

A

usually occurs in periods of recession and depression

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3
Q

output per person

A

GDP per capita

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4
Q

person who owes money

A

debtor

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5
Q

What are the causes of inflation?

A
  • demand for goods and services is greater than supply
  • when large supply of money is spent for goods that are in short supply
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6
Q

the total dollar value of all final goods and service produced in a country during one year

A

Gross Domestic Product (GDP)

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7
Q

production output in relation to a unit of input

A

productivity

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8
Q

increase in the general level or prices

A

inflation

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9
Q

the phase in which unemployment begins to decrease

A

recovery

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10
Q

sales of durable and non-durable goods brought by consumers

A

retail sales

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11
Q
  • a person that purchases a corporate or government bond
  • this means you have lent money to the organization and in return are paid interest for the use of your money
A

creditor

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12
Q

How do interest rates affect business activities?

A
  • if interest rates are high then will have higher business costs
  • if rate is low, then lower business costs
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13
Q

When do we pay interest?

A

we pay interest when we borrow money

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14
Q

phase marked by a prolonged period of high unemployment, weak consumer sales and business failures

A

depression

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15
Q

the portion of people in the labor force who is not working

A

unemployment rate

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16
Q

period in which most peoplewho want to work are working, businesses produce goods and services and the rate of GDP growth increases

A

prosperity

17
Q

What is an effect of deflation?

A

prices of products are lower but people have less money to buy them

18
Q

When do we receive interest?

A

when we give money to invest, this is our fee for giving it

19
Q

movement of economy from one condition to another and back again

A

business cycle

20
Q

all people above age 16 who are actively workign or seeking work

A

labor force

21
Q

government spends more than it takes in

A

budget deficit

22
Q

What are the economic indicators for spending?

A
  • Consumer Spending - the money you earn and spend
  • Retail Sales - the sales of durable and nondurable goods bought by consumers
  • Unemployment rate - the portion of people in the labor force who are not working
  • Gross National Product - GNP - the total market value of goods and services produced by the residents of a country, even if they live abroad
  • Gross Domestic Product - GDP - the total dollar value of the final goods and services produced in a country each year
  • GDP per Capita - the output per person, calculated by dividing GDP by total population
23
Q

total amount owed by federal government

A

National Debt

24
Q

the interest rate individuals pay to borrow for the purchase of a new home

A

mortgage rate

25
Q

What are the 4 phases of the business cycle?

A
  1. Prosperity phase
  2. Recession phase
  3. Depression phase
  4. Recovery phase
26
Q

represents debt for an organization

A

bond

27
Q

refers to money spent by business for an item over long period of time

A

capital project

28
Q

a decrease in the general level of prices

A

deflation

29
Q

stock ownership, means ownership

A

equity

30
Q

What causes interest rates to change?

A

the supply and demand for money

31
Q

a number that compares prices in one year with prices in an earlier base year; measures inflation

A

Consumer Price Index

32
Q

the interest rate banks make available to their best business customers like large corporations

A

prime rate

33
Q

What is interest?

A

the cost of borrowing or lending money

34
Q

refers to salaries and wages as well as investment income and government payments to individuals

A

personal income

35
Q

a number that compares prices in one year with some earlier base year

A

price index

36
Q

period in which demand begins to decrease

A

recession

37
Q

represents ownership in a corporation

A

stock

38
Q

government may spend less than it takes in

A

budget surplus

Intro to Business (41 decks)

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