Term
|
Definition
| The resources we use to produce goods and services are limited |
|
|
Term
|
Definition
| The study of choices when there is scarcity |
|
|
Term
|
Definition
| The resources used to produce goods and services; also known as production inputs of resources. |
|
|
Term
|
Definition
| Resources provided by nature and used to produce goods and services. |
|
|
Term
|
Definition
| Human effort, including both physical and mental effort, used to produce goods and services. |
|
|
Term
|
Definition
| The stock of equipment, machines, structures, and infrastructure that is used to produce goods and services. |
|
|
Term
|
Definition
| The knowledge and skills acquired by a worker through education and experience used to produce goods and services. |
|
|
Term
|
Definition
| The effort used to coordinate the factors of production--Natural resources, labor, physical capital, human capital--to produce and sell products. |
|
|
Term
|
Definition
| Answers the question "what us?" or "what will be?" |
|
|
Term
|
Definition
| Answers the question "what ought to be?" |
|
|
Term
|
Definition
| A simplified representation of an economic environment, often employing a graph. |
|
|
Term
|
Definition
| A measure of something that can take on different values. |
|
|
Term
|
Definition
| The Latin expression meaning that other variables are held fixed. |
|
|
Term
|
Definition
| A small, one unit change in value |
|
|
Term
|
Definition
| The study of the nations economy as a whole; focuses on the issues of inflation, unemployment, and economic growth. |
|
|
Term
|
Definition
| The study of the choices made by households, firms and the government and how these choices affect the market for goods and services. |
|
|
Term
|
Definition
| A relationship in which two variables move in the same direction. |
|
|
Term
|
Definition
| A relationship in which two variables move in opposite directions. |
|
|
Term
|
Definition
| The verticle difference between two points (the rise) divided by the horizontal difference (the run) |
|
|
Term
|
Definition
| What you sacrifice to get something. |
|
|
Term
| Production possibilities curve |
|
Definition
| A curve that shows the possible combinations of products that an economy can produce, given that its productive resources are fully employed and efficiently used. |
|
|
Term
|
Definition
| The additional benefit resulting from a small increase in some activity. |
|
|
Term
|
Definition
| The additional cost resulting from a small increase in some activity. |
|
|
Term
|
Definition
| The face value of an amount of money |
|
|
Term
|
Definition
| the value of an amount of money in terms of what it can buy. |
|
|
Term
|
Definition
| The ability of one person or nation to produce a good at a lower opportunity cost than another person or nation. |
|
|
Term
|
Definition
| The ability of one person or nation to produce a product at a lower resource cost than another person or nation. |
|
|
Term
|
Definition
| A good or service produced in a foreign country and purchased by residents for the home country (for example, the USA) |
|
|
Term
|
Definition
| A good or service produced in the home country (for example, the USA and sold in another country) |
|
|
Term
|
Definition
| An economy in which people specialize and exchange goods and services in markets. |
|
|
Term
| centrally planned economy |
|
Definition
| An economy in which a government bureaucracy decides how much of each good to produce, how to produce the good, and who gets the good. |
|
|
Term
| Perfectly Competitive Economy |
|
Definition
| A market with many sellers and buyers of a homogeneous product and no barriers to entry. |
|
|
Term
|
Definition
| The amount of a product that consumers are willing and able to buy. |
|
|
Term
|
Definition
| A table that shows the relationship between the price of a product and the quantity demanded, ceteris paribus. |
|
|
Term
|
Definition
| A curve that shows the relationship between the price of a good and quantity demanded by an individual consumer, ceteris paribus. |
|
|
Term
|
Definition
| There is a negative relationship between price and quantity demanded, ceteris paribus. |
|
|
Term
| Change in quantity demanded |
|
Definition
| A change in the quantity consumers are willing and able to buy when the price changes; represented graphically by movement along the demand curve. |
|
|
Term
|
Definition
| A curve showing the relationship between price and quantity demanded by all consumers, ceteris paribus. |
|
|
Term
|
Definition
| The amount of a product that firms are willing and able to sell. |
|
|
Term
|
Definition
| A table that shows the relationship between the price of a product and quantity supplied, ceteris paribus. |
|
|
Term
|
Definition
| A curve showing the relationship between price and quantity supplied by a single firm, ceteris paribus. |
|
|
Term
|
Definition
| There is a positive relationship between prices and quantity supplied, ceteris paribus |
|
|
Term
| Change in quantity supplied |
|
Definition
| A change in the quantity firms are willing and able to sell when the price changes; represented graphically by movement along the supply curve. |
|
|
Term
|
Definition
| The lowest price at which a product will be supplied. |
|
|
Term
|
Definition
| A curve showing the relationship between the market price and quantity supplied by all firms, ceteris paribus. |
|
|
Term
|
Definition
| A situation in which the quantity demanded equals the quantity supplied at the prevailing market price. |
|
|
Term
|
Definition
| A situation in which, at the prevailing price, the quantity demanded exceeds the quantity supplied. |
|
|
Term
|
Definition
| A situation in which the quantity supplied exceeds the quantity demanded at the prevailing price. |
|
|
Term
|
Definition
| A shift of the demand curve caused by a change in a variable other than the price of the product. |
|
|
Term
|
Definition
| A good for which an increase in income increases demand. |
|
|
Term
|
Definition
| A good for which an increase in income decreases demand. |
|
|
Term
|
Definition
| Two goods for which an increase in the price of one good increases the demand for the other good. |
|
|
Term
|
Definition
| Two goods for which a decrease in the price of one good increases the demand for the other good. |
|
|
Term
|
Definition
| A shift of the supply curve caused by a change in a variable other than the price of the product. |
|
|
Term
|
Definition
| Sustained increases in the average prices of all goods and services. |
|
|
Term
| Gross domestic product (GDP) |
|
Definition
| The total market value of final goods and services produced within an economy in a given year. |
|
|
Term
|
Definition
| Goods used in the production process that are not final goods and services. |
|
|
Term
|
Definition
| A measure of GDP that controls for changes in prices. |
|
|
Term
|
Definition
| The value of GDP in current dollars. |
|
|
Term
|
Definition
| Sustained increases in the real GDP of an economy over a long period of time. |
|
|
Term
|
Definition
| Purchases of newly produced goods and services by households. |
|
|
Term
| Private investment expenditures |
|
Definition
| Purchases of newly produced goods and services by firms. |
|
|
Term
|
Definition
| Total new investment expenditures. |
|
|
Term
|
Definition
| Reduction in the value of capital goods over a one year period due to physical wear and tear and also to obsolescence; also called capital consumption allowance. |
|
|
Term
|
Definition
| Gross investment minus depreciation. |
|
|
Term
|
Definition
| Purchases of newly produced goods and services by local, state, and federal government. |
|
|
Term
|
Definition
| Payments from governments to individuals that do not correspond to the production of goods and services. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| The excess of imports over exports. |
|
|
Term
|
Definition
| The excess of exports over imports. |
|
|
Term
|
Definition
| The total income earned by a nation's residents both domestically and abroad in the production of goods and services. |
|
|
Term
|
Definition
| GDP plus net income earned abroad. |
|
|
Term
|
Definition
| Income, including transfer payments, received by households. |
|
|
Term
| Personal Disposable Income |
|
Definition
| Personal income that households retain after paying income taxes. |
|
|
Term
|
Definition
| The sum of all the income--wages, interest, profits, and rent--generated by an organization. For a firm, we can measure value added by the dollar value of the firm's sales minus the dollar value of the goods and services purchased from other firms. |
|
|
Term
|
Definition
| An index that measures how the prices of goods and services included in GDP change over time. |
|
|
Term
|
Definition
| A method for calculating changes in prices that uses an average base years from neighboring years. |
|
|
Term
|
Definition
| Commonly defined as six consecutive months of declining real GDP. |
|
|
Term
|
Definition
| The date at which recession starts. |
|
|
Term
|
Definition
| The date at which output stops falling in a recession. |
|
|
Term
|
Definition
| The period after a trough in the business cycle during which the economy recovers. |
|
|
Term
|
Definition
| The common name for a severe recession. |
|
|
Term
|
Definition
The total number of workers, both the employed and the unemployed.
labor force equals employed plus unemployed |
|
|
Term
|
Definition
The percentage of the labor force that is unemployed.
unemployment rate equals unemployed over labor force times 100 |
|
|
Term
| Labor force participation rate |
|
Definition
The percentage of the population over 16 years of age that is in the labor force.
labor force participation rate equals labor force over population 16 years and older times 100 |
|
|
Term
|
Definition
| Workers who left the labor force because they could not find jobs. |
|
|
Term
|
Definition
| The component of unemployment attributed to seasonal factors. |
|
|
Term
|
Definition
| Unemployment that occurs during fluctuations in real GDP. |
|
|
Term
|
Definition
| Unemployment that occurs with the normal workings of the economy, such as workers taking time to search for suitable jobs and firms taking time to search for qualified employees. |
|
|
Term
|
Definition
| Unemployment that occurs when there is a mismatch of skills and jobs. |
|
|
Term
| Natural rate of unemployment |
|
Definition
| The level of unemployment at which there is no cyclical unemployment, it consists of only frictional and structural unemployment. |
|
|
Term
|
Definition
| The level of unemployment that occurs when the unemployment rate is the natural rate. |
|
|
Term
|
Definition
| Payments unemployed people receive from the government. |
|
|
Term
|
Definition
| A price index that measures the cost of a fixed basket of goods chosen to represent the consumption pattern of a typical consumer. |
|
|
Term
| Cost of living adjustments (COLA's) |
|
Definition
| Automatic increases in wages or other payments that are tied to the CPI. |
|
|
Term
|
Definition
The percentage rate of change in the price level.
|
|
|
Term
|
Definition
| Negative inflation or falling prices of goods and services. |
|
|
Term
|
Definition
| inflation that is expected. |
|
|
Term
|
Definition
| Inflation that is not expected. |
|
|
Term
|
Definition
| The costs associated with changing prices and printing new price lists when there is inflation. |
|
|
Term
|
Definition
| Costs of inflation that arise from trying to reduce holdings of cash. |
|
|
Term
|
Definition
| An inflation rate exceeding 50% per month. |
|
|
