BA 113 - Chapter Two
Terms
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- Define ECONOMICS:
- The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
- Define MACROECONOMICS:
- The part of economic study that looks at the operation of a nation's economy as a whole.
- Define MICROECONOMICS:
- That part of economic study that looks at the behavior of people and organizations in particular markets.
- Define RESOURCE DEVELOPMENT:
- The study of how to increase resources and to create the conditions that will make better use of those resources.
- Who was the Father of Economics?
- Adam Smith, an early economics pioneer who envisioned a system for creating wealth, and improving the lives of everyone.
- Define the phrase INVISIBLE HAND:
- Phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all.
- Define CAPITALISM:
- An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
- Define SUPPLY:
- The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.
- Define MARKET PRICE:
- The price determined by supply and demand.
- What is PERFECT COMPETITION?
- The market situation in which there are many sellers of nearly identical products and no seller is large enough to dictate the price of the product.
- What is MONOPOLISTIC COMPETITION?
- The market situation in which there are a large number of sellers that produce similar products, but the products are perceived by buyers as different.
- What is OLIGOPOLY?
- A form of competition in which the market is dominated by just a few sellers.
- What is a MONOPOLY?
- A market in which there is only one seller.
- What is SOCIALISM:
- An economic system based on the premise that most basic businesses should be owned by the government so that profits can be evenly distributed among the people.
- Define COMMUNISM:
- An economic and political system in which the state makes all economic decisions and owns all the major forms of production.
- Define FREE-MARKET ECONOMY:
- Economic systems in which decisions about what to produce and in what quantities are decided by the market, that is, by buyers and sellers negotiating prices for goods and services.
- What is a COMMAND ECONOMY?
- Economic systems in which the government largely decides what goods and services will be producted, who will get them, and how the economy will grow.
- Define MIXED ECONOMY:
- Economic systems in which some allocation of resources is made by the market and some is mad by the government.
- Define GROSS DOMESTIC PRODUCT (GDP):
- The total value of goods and service produced in a country in a given year.
- Define UNEMPLOYMENT RATE:
- The number of civilians at least 16 years old who are unemployed adn tried to find a job within the prior four weeks.
- Define CONSUMER PRICE INDEX (CPI):
- Monthly statistics that measure changes in the prices of about 400 goods and services that consumers buy.
- Define PRODUCER PRICE INDEX (PPI):
- An index that measures prices at the wholesale level.
- Define INFLATION:
- A general rise in prices of goods and services over a period of time.
- Define DISINFLATION:
- A condition where price increases are slowing - the inflation rate is slowing.
- Define RECESSSION:
- Two or more consecutive quarters of decline in the GDP.
- Define DEPRESSION:
- A severe recession.
- Define MONETARY POLICY:
- The management of money supply and interest rates.
- Define FISCAL POLICY:
- Government efforts to keep the economy stable by increasing or decreasing taxes or government spending.
- What is NATIONAL DEBT?
- The result of a series of government deficits (when the government spends more money than it collects in taxes) over time.
- Name the 3 ECONOMIC INDICATIORS:
- 1. Gross Domestic Product (GDP), 2. Consumer Price Index (CPI), and 3. Producer Price Index (PPI)