Economics Review
Terms
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- Corporation
- a business chartered by a state or the federal government that enjoys limited liability and has unlimited life (open corporations have stocks that can be bought by anyone, while closed corporations have stocks that are not for sale to the general public)
- Economics
- the study of why people make one choice rather than another when buying and selling, spending and saving- explains how businesses are formed to satisfy different wants and needs
- Exports
- The goods and services that individuals and businesses in a country sell to foreign countries
- Resources
- the things that go into the making of goods and services (natural resources are things produced by the world around us; human resources are the people who put everything together to make goods and services; capital resources are machines, tools, and buildings used in the production of goods and services)
- Market price
- the price at which goods and services are sold; the point at which supply and demand curves intersect
- Goods
- the things of value that can be seen or touched
- Variable expense
- the expenses in a budget that are not the same each week or month
- Free enterprise
- another name for capitalism, the economic system of the United States
- Luxuries
- items that people buy that add to their enjoyment
- Services
- things of value that can neither be seen nor touched
- Monopoly
- a situation in which there is only one producer or seller of an item. And a fun game by parker brothers!
- Consumers
- those who buy or use goods and services
- Lockout
- occurs when management shuts down a plant where there is or might be a strike
- Market economic system
- an economic system in which decisions are made as the result of the actions of buyers and sellers
- Copyright
- A legal monopoly, granted by the government, giving exclusive rights to authors, artists, and composers to reproduce, perform, and sell their work
- Producers
- those who make a good or service
- Producer
- one who makes a good or service
- Capitalism
- an economic system in which the means of production are privately owned, and the what, how, and who questions are answered by the market
- Supply
- the quantity of goods and services offered at all prices
- Private property
- something of value owned by people
- Limited liability
- a corporation has a limited liability because there is no limit to the amount of money a proprietor or partner might lose
- Demand
- the quantity of an item that buyers would take at any and all prices
- Overhead expense
- expenses that must be paid regardless of how much or how little the company earns, fixed expenses
- Public property
- something of value owned by government
- Merger
- the acquisition or takeover of one company by another (horizontal merger is a combination of firms that sell similar products or services, a vertical merger is when a company acquires one of its suppliers, and a conglomerate merger is when two or more unrelated businesses combine)
- Communism
- an economic and political system in which all property is publicly owned, and the government makes all what, how, and who decisions
- Subsidy
- A payment by the government to individuals or firms in an industry
- Socialism
- an economic system that has both private and public ownership of the means of production, and the what, how, and who questions are answered both by government and private individuals- sometimes is a representative government
- Pension
- cash benefits, often for retirement
- Command economic system
- an economic system in which the what, how, and who questions are answered by the government
- Balanced budget
- A budget when the receipts are exactly equal to the expenditures- the input is exactly equal to the output
- Mass production
- the manufacture of large quantities of identical products using interchangeable parts
- Patent
- A grant issued by the federal government that gives inventors the sole right to manufacture, use and sell their inventions
- Conspicuous consumption
- spending that is done to impress other people
- Profit
- what remains of income after a business has paid all its costs of doing business- net earnings
- Savings
- that portion of personal or business income that is not spent
- Income tax
- A tax on the earnings of individuals and corporations
- Two-tier wage system
- occurs when new employees are paid lower wages than senior employees are
- Mediation
- a method of settling a dispute that calls a third party, a mediator, to help bring the two parties together, is not binding
- Wage
- a payment for work performed
- Arbitration
- a method of settling a dispute that calls a third party, an arbitrator, to make a decision that is binding for both sides
- Necessities
- those goods and services that people need to exist
- Collective bargaining
- the negotiations between union and management representatives over salaries, benefits, and working conditions
- Imports
- The goods and services that individuals and businesses in a country purchase from foreign countries
- Charter
- the license given to a corporation that divides the business into many parts or shares
- Stock exchange
- marketplaces in which the stocks of certain corporations can be bought and sold
- Bear market
- markets where the price of stock is expected to decrease or fall- pessimistic view
- Consumer Price Index
- an index that measures changes in the cost of living- Social Security is tied to this
- Capital gain
- the profit made after stock is sold
- Inflation
- a rise in the price of goods and services
- Medicare
- provides hospital and medical care benefits to elderly and disabled persons covered by Social Security
- Stockholders
- people who own shares of stock
- Sole proprietorship
- a business that is owned and run by one individual, the proprietor
- Recession
- a phase in the business cycle characterized by a decline in spending by businesses and consumers and an increase in unemployment
- Excise tax
- A tax on the manufacture or sale of a specific good or service
- Income
- payments received- the money that a person is paid
- Automation
- production in which machines are operated by other machines
- Board of directors
- the representatives elected by stockholders to oversee business operations and look after the interests of the stockholders
- Union
- an association of workers seeking to improve wages and working conditions for its members
- Craft union
- membership in these unions was restricted to skilled workers in one particular craft or trade
- Investments
- refers to the purchase of property, or other items, in the hope that in time it will increase in value- it also refers to business spending
- Closed shop
- a practice of management that required all employees to be union members before they could be hired
- Assembly line
- a method of mass production using interchangeable parts that was first used by Henry Ford to produce the Model T
- Injunction
- a court order
- Consumption
- the spending for consumer goods and services
- Bull market
- markets where the price of stock is expected to increase or rise- optimistic view
- Protective tariff
- Raises the price of the imported goods high enough to discourage many Americans from buying them
- Depositor
- people who deposit their savings in banks for protection and interest that the banks pay
- Credit
- the advance of money in exchange for a promise to repay at a specified time
- Money
- anything generally accepted in payment for goods and services
- Budget
- a plan for spending and saving income
- Wagner Act
- an act of Congress that gave workers the right to form or join any union of their own choice, and the right to strike- it also provided the right for unions to bargain collectively
- Insurance
- a method of protection against financial loss by sharing the risk with others
- Wages
- a payment for work performed
- Interchangeable parts
- an idea created by Eli Whitney, this is the underlying principal of mass production
- Barter
- a system in which people exchange a good or service that they have for one that they need
- Fixed expense
- expenses that must be paid each week or month
- Social Security
- benefits that are paid to people who have contributed to the programs during their working years, the benefits include pensions, monthly payments, and unemployment insurance programs
- Sales tax
- Charges one rate for a large number of items- a tax on all items except unprepared food (from the grocery store)