Vocab M-R

Question 1

Market

Answer 1

A group of buyers and sellers of a particular good or service.

Question 2

Market system

Answer 2

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.

Question 3

Medium of exchange

Answer 3

What sellers generally accept and buyers generally use to pay for goods and services.

Question 4

Monetary policy

Answer 4

The behavior of the Federal Reserve System regarding the money supply.

Question 5

Money supply

Answer 5

The quantity of money available in the economy.

Question 6

National debt

Answer 6

The total amount of outstanding government securities held by the public.

Question 7

Natural resources

Answer 7

Physical inputs that occur naturally in our world.

Question 8

Net worth statement

Answer 8

A record of what a family or person would own after paying off all liabilities; assets – liabilities = net worth.

Question 9

Opportunity cost

Answer 9

The value of the highest foregone alternative.

Question 10

PACED decision making grid

Answer 10

– Problem, Alternative, Criteria, Evaluate and Decision grid is a graphic organizer used to make an informed decision.

Question 11

Payroll deductions

Answer 11

Amounts subtracted from a paycheck as the government requires or the employee requests Mandated deductions include various taxes. Voluntary deductions include loan payments or deposits into saving accounts.

Question 12

Per capita GDP

Answer 12

Gross Domestic Product divided by population.

Question 13

Personal income taxes

Answer 13

A tax levied on a person’s annual income.

Question 14

Prime Rate

Answer 14

The interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers).

Question 15

Principal

Answer 15

The original amount of money invested or borrowed, excluding any interest or dividends

Question 16

Productivity

Answer 16

A ratio of output to input. For example, output per worker is a measure of the productivity of labor. The productivity of a firm can be increased through specialization or division of labor, investment in human capital, and investment in capital resources.

Question 17

Profit

Answer 17

The revenue remaining after the business has paid its costs of production. Profit is the income payment to entrepreneurs.

Question 18

Property taxes

Answer 18

Required payments on one’s property to local government.

Question 19

Public goods

Answer 19

Goods that cannot be sold effectively in the marketplace; these goods are characterized by shared consumption and non-exclusion. As a result, government usually provides these goods.

Question 20

Purchasing power

Answer 20

A measurement of the relative value of money in terms of the quality and quantity of goods and services it can buy.

Question 21

Rate of return

Answer 21

Also called the “yield,” this is the return on an investment expressed as a percentage of its cost.

Question 22

Rent

Answer 22

The amount charged to use something for a period of time. The income payment received for the use of natural resources.

Question 23

Rent to Own

Answer 23

To borrow with the intent to take permanent possession through purchase.

Question 24

Resources

Answer 24

Things used to produce goods and services.

Question 25

Risk

Answer 25

Exposure to loss of investment capital due to a variety of causes such as business failure, stock market volatility, and interest rate changes; in business, the likelihood of loss or reduced profit; the danger or probability of loss to an individual.