economics new vocab part 2
Terms
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- balance of payments
- the difference between the money flowing into a country and the money flowing out of a country
- real GDP
- gross domestic product adjusted for inflation
- command economy
- an economic system where a central authroity makes the major decisions
- stagflation
- a period of rising prices (inflation) combined with increases in unemployment (recession)
- the prime interest rate
- the interest rate banks offer thier most preferred customers
- disposable income
- income available to consumers after taxes are deducted
- opportunity cost
- the value in time, money, and resources given up in making a choice
- supply side economics (trickle down economics)
- the theory that government can encourage economic growth by helping businesses
- economic model
- a table, graph, or equations that are used to help understand economic behavior
- equilibrium price
- the price where the quantity supplied equals the quantity demanded
- laffer curve
- a model showing that lower tax rates will stimulate more tax revenue collected
- adam smtih's invisible hand theory
- a theory that states each person acting for there own well being will serve the interests of society as a whole
- global economy
- the national economies of nations merged into a larger world economy
- socialism
- an economic system where the resources need to reproduce goods and services are owned by the government
- a government subsidy
- a government payment to encourage or protect a certain economic activity
- interest vs interest income
- interest is the price for borrowed money; interest income is what is earned by one who loans money
- national debt
- the total amount of money the federal government borrows, the annual deficits combined
- aggregate supply
- the total value of goods and services that all firms produce in a specified period of time
- asset
- an item of value such as money, stock, and land
- elasticity of demand/supply
- how sensitive changes in the quantitity demanded are to changes in rpcies
- investment spending
- business decisions to spend on capital goods to promote economic growth
- a bond
- a loan of money
- tariff
- a tax placed on imported products
- protectionist trade policy
- a foreign trade policy that protects domestic producers with tariffs or quotas
- trade deficit
- trade where spending on imports exceeds money made from selling exports