Economics Vocabulary Flashcards
Terms
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- economics
- the study of how things are made, bought, sold, and used.
- goods
- anything that can be manufactured or grown
- services
- something done for others in exchange for money
- resources
- anything used to produce a good or a service
- consumers
- people who buy or use a good/service.
- supply
- amount of a good or a service available to consumers
- capital
- money needed to produce goods and services
- division of labor
- when each worker does one type of job
- gross income
- total amount of money made
- net income
- amount of money left after expenses (profit)
- entrepreneur
- a person who starts a new business (risk taker)
- opportunity cost
- what you give up when you make one choice over another (trade off)
- marketing
- includes advertising, shipping, storing, and selling of goods
- wholesale
- buying large quantities of goods at a lower price
- retail
- buying individual items at higher prices
- traditional economy
- an economy in which people supply the goods they need by methods passed down from ancestors
- free market economy
- privately-owned prodution, supply and demand, competition, and profit motive. (Adam Smith)
- centrally-planned (command) economy
- government controls production/distribution; no competition, not run for profit (Ex: comunist) (Karl Marx)
- mixed economy
- where individuals and government are partners; most means of production are privately-owned but government can guide and regulate economy
- capitalism
- people put money (capital) into businesses and hope for a profit
- recession
- a slowdown of economic activity
- depression
- a severe recession
- Gross Domestic Product
- total value (in dollars) of all goods and services produced in the U.S. each year
- standard of living
- quality of life based on amount of goods/services one can purchase plus amount of leisure time
- inflation
- general rise in prices of most goods and services
- deficit
- when the government spends more money than it makes
- national debt
- the total amount the government owes on money it has borrowed
- Federal Reserve System (the Fed)
- the central bank of the United States; twelve federal reserve districts, each with one F.R. bank; supplies banks with new money, supervises member banks, provides check-clearing services, and affects interest rates
- profit
- the income that remains after a business has paid off its expenses, taxes, and other costs
- stockholder (shareholder)
- a person who buys shares of ownership in a corporation
- dividend
- a share of the profit paid to the stockholders of a corporation
- capital goods
- the buildings and machines needed to make goods and to provide services
- sole proprietorship
- a business owned by one person
- partnership
- a business owned by two or more people
- corporation
- a large business that has many owners
- credit union
- a non-profit "bank" that offers savings accounts and provides loans to qualified members