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Question		Answer
Absolute advantage start learning		The ability to produce something with fewer resources than other producers would use to produce the same thing
Alternatives start learning		Options among which to make choices.
Balance of trade start learning		The part of a nation's balance of payments that deals with merchandise (or visible) imports or exports.
Bank, commercial start learning		A financial institution accepts checking deposits, holds savings, sells traveler's checks and performs other financial services.
Barter start learning		The direct trading of goods and services without the use of money.
Benefit start learning		The gain received from voluntary exchange.
Bond start learning		A certificate reflecting a firm's promise to pay the holder a periodic interest payment until the date of maturity and a fixed sum of money on the designated maturity date.
Business (firm) start learning		Private profit-seeking organizations that use resources to produce goods and services.
Capital start learning		All buildings, equipment and human skills used to produce goods and services.
Capital resources start learning		Goods made by people and used to produce other goods and services. Examples include buildings, equipment, and machinery.
Choice start learning		What someone must make when faced with two or more alternative uses of a resource (also called economic choice).
Circular flow of goods and services start learning		A model of an economy showing the interactions between households and business firms as they exchange goods and services
Collateral start learning		Anything of value that is acceptable to a lender to guarantee repayment of a loan.
Command economy start learning		A mode of economic organization in which the key economic functions--what, how, and for whom--are principally determined by government directive.
Comparative advantage start learning		The principle of comparative advantage states that a country will specialize in the production of goods in which it has a lower opportunity cost than other countries.
Competition start learning		The effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.
Complements start learning		Products that are used with one another such as hamburger and hamburger buns
Consumers start learning		People whose wants are satisfied by consuming a good or a service.
Consumption start learning		In macroeconomics, the total spending, by individuals or a nation, on consumer goods during a given period. Strictly speaking, consumption should apply only to those goods totally used, enjoyed, or "eaten up" within that period. I
Consumer spending start learning		The purchase of consumer goods and services.
Corporation start learning		A legal entity owned by stockholders whose liability is limited to the value of their stock.
Costs of production start learning		All resources used in producing goods and services, for which owners receive payments.
Craftsperson start learning		A worker who completes all steps in the production of a good or service.
Criteria start learning		Standards or measures of value that people use to evaluate what is most important.
Decision making start learning		Choosing from alternatives the one with the greatest benefit net of costs.
Deflation start learning		A sustained and continuous decrease in the general price level.
Demand start learning		A schedule of how much consumers are willing and able to buy at all possible prices during some time period.
Demand decrease start learning		A decrease in the quantity demanded at every price; a shift to the left of the demand curve.
Demand increase start learning		An increase in the quantity demanded at every price; a shift to the right of the demand curve.
Determinants of demand start learning		Factors that influence consumer purchases of goods, services, or resources.
Determinants of supply start learning		Factors that influence producer decisions about goods, services, or resources.
Distribution start learning		The manner in which total output and income is distributed among individuals or factors (e.g., the distribution of income between labor and capital).
Division of labor start learning		The process whereby workers perform only a single or a very few steps of a major production task (as when working on an assembly line.)
Durables start learning		Consumer goods expected to last longer than three years.
Earn start learning		Receive payment (income) for productive efforts.
Economic growth start learning		An increase in the total output of a nation over time. Economic growth is usually measured as the annual rate of increase in a nation's real GDP.
Economic system start learning		The collection of institutions, laws, activities, controlling values, and human motivations that collectively provide a framework for economic decision making.
Economic wants start learning		Desires that can be satisfied by consuming a good or a service. Some economic wants range from things needed for survival to things that are nice to have.
Entrepreneur start learning		One who organizes, manages, and assumes the risks of a business or enterprise.
Entrepreneurship start learning		The human resource that assumes the risk of organizing other productive resources to produce goods and services.
Equilibrium price start learning		The market clearing price at which the quantity demanded by buyers equals the quantity supplied by sellers.
Exchange start learning		Trading goods and services with others for other goods and services or for money (also called trade). When people exchange voluntarily, they expect to be better off as a result.
Exchange rates start learning		The rate, or price, at which one country's currency is exchanged for the currency of another country.
Excise Tax start learning		Taxes imposed on specific goods and services, such as cigarettes and gasoline.
Exports start learning		Goods or services produced in one nation but sold to buyers in another nation.
Factors of production start learning		Resources used by businesses to produce goods and services.
Federal Reserve System start learning		The central bank and monetary authority of the United States.
Final goods start learning		Products that end up in the hands of consumers.
Fiscal policy - start learning		A government's program with respect to (1) the purchase of goods and services and spending on transfer payments, and (2) the amount and type of taxes.
Functions of money start learning		The roles played by money in an economy. These roles include medium of exchange, standard of value, and store of value.
Full employment start learning		A term that is used in many senses. Historically, it was taken to be that level of employment at which no (or minimal) involuntary unemployment exists.
Goods start learning		Objects that can satisfy people's wants.
Government start learning		National, state and local agencies that use tax revenues to provide goods and services for their citizens.
Gross domestic product (GDP) start learning		The value, expressed in dollars, of all final goods and services produced in a year.
Gross domestic product (GDP), real start learning		GDP corrected for inflation.
Households start learning		Individuals and family units which, as consumers, buy goods and services from firms and, as resource owners, sell or rent productive resources to business firms.
Human capital start learning		The health, strength, education, training, and skills which people bring to their jobs.
Human resources start learning		The quantity and quality of human effort directed toward producing goods and services (also called labor).
Incentives start learning		Factors that motivate and influence the behavior of households and businesses. Prices, profits, and losses act as incentives for participants to take action in a market economy.
Imports start learning		Goods or services bought from sellers in another nation.
Income start learning		The payments made for the use of borrowed or loaned money.
Increase in productivity start learning		When the same amount of an output can be produced with fewer inputs; more output can be produced with the same amount of inputs; or a combination of the two.
Inflation start learning		A sustained and continuous increase in the general price level.
Interdependence start learning		Dependence on others for goods and services; occurs as a result of specialization.
Interest rates start learning		The price paid for borrowing money for a period of time, usually expressed as a percentage of the principal per year.
Investment in capital goods start learning		Occurs when savings are used to increase the economy's productive capacity by financing the construction of new factories, machines, means of communication, and the like.
Investment start learning		The purchase of a security, such as a stock or bond.
Investment in capital resources start learning		Business purchases of new plant and equipment.
Investment in human capital start learning		An action taken to increase the productivity of workers. These actions can include improving skills and abilities, education, health, or mobility of workers.
Labor force start learning		That group of people 16 years of age and older who are either employed or unemployed.
Labor market start learning		A setting in which workers sell their human resources and employers buy human resources.
Labor union start learning		A group of employees who join together to improve their terms of employment.
Land start learning		Natural resources or gifts of nature that are used to produce goods and services.
Law of demand start learning		The principle that price and quantity demanded are inversely related.
Law of supply start learning		The principle that price and quantity supplied are directly related.
Loss start learning		Business situation in which total cost of production exceeds total revenue; negative profit.
Market start learning		A setting where buyers and sellers establish prices for identical or very similar products, and exchange goods and/or services.
Market economy start learning		An economic system where most goods and services are exchanged through transactions by private households and businesses. Prices are determined by buyers and sellers making exchanges in private markets.
Medium of exchange start learning		One of the functions of money whereby people exchange goods and services for money and in turn use money to obtain other goods and services.
Mixed economy start learning		The dominant form of economic organization in noncommunist countries.
Monetary policy start learning		The objectives of the central bank in exercising its control over money, interest rates, and credit conditions. The instruments of monetary policy are primarily open-market operations, reserve requirements, and the discount rate.
Money start learning		Anything that is generally accepted as a medium of exchange with which to buy goods and services, a good that can be used to buy all other goods and services, that serves as a standard of value, and has a store of value.
Money market start learning		A term denoting the set of institutions that handle the purchase or sale of short-term credit instruments like Treasury bills and commercial paper.
National debt start learning		The net accumulation of federal budget deficits.
National income start learning		he amount of aggregate income earned by suppliers of resources employed to produce GNP; net national product plus government subsidies minus indirect business taxes.
Natural resources start learning		"Gifts of nature" that are used to produce goods and services. They include land, trees, fish, petroleum and mineral deposits, the fertility of soil, climatic conditions for growing crops, and so on.
Non-durables start learning		Consumer goods expected to last less than three years.
Non-price determinants of supply start learning		The factors that influence the amount a producer will supply of a product at each possible price. The non-price determinants of supply are the factors that can change the entire supply schedule and curve.
Normal profit start learning		The minimum payment an entrepreneur expects to receive to induce the entrepreneur to perform entrepreneurial functions.
Normative economics start learning		Normative economics considers "what ought to be"--value judgments, or goals, of public policy. Positive economics, by contrast, is the analysis of facts and behavior in an economy, or "the way things are."
Opportunity cost start learning		The next best alternative that must be given up when a choice is made.
Physical capital start learning		Manufactured items used to produce goods and services.
Price start learning		The money value of a unit of a good, service, or resource
Prices start learning		The amounts that people pay for units of particular goods or services.
Private goods start learning		A commodity that benefits the individual. An example is bread, which, if consumed by one person, cannot be consumed by another person.
Producers start learning		People who use resources to make goods and services (also called workers).
Production start learning		The making of goods available for use; total output especially of a commodity or industry.
Productive resources start learning		All natural resources (land), human resources (labor), and human-made resources (capital) used in the production of goods and services.
Productivity start learning		The ratio of output (goods and services) produced per unit of input (productive resources) over some period of time.
Profit start learning		The difference between total revenues and the full costs involved in producing or selling a good or service; it is a return for risk taking.
Property tax start learning		Taxes paid by households and businesses on land and buildings.
Public goods start learning		A commodity whose benefits are indivisibly spread among the entire community, whether or not particular individuals desire to consume the public good.
Quantity demanded start learning		The amount of a product consumers will purchase at a specific price.
Quota start learning		A legal limit on the quantity of a particular product that can be imported or exported.
Quantity supplied start learning		The amount of a product producers will produce and sell at a specific price.
Resources start learning		All natural, human, and human-made aids to production of goods and services (also called productive resources).
Revenue start learning		Payments received by businesses from selling goods and services.
Sales tax start learning		Taxes paid on the goods and services people buy.
Save start learning		Set aside earnings (income) for a future use.
Saving start learning		Occurs when individuals, businesses, and the economy as a whole do not consume all of current income (or output).
Scarcity start learning		The condition that results from the imbalance between relatively unlimited wants and the relatively limited resources available for satisfying those wants.
Services start learning		Activities that can satisfy people's wants.
Shortage start learning		The situation resulting when the quantity demanded exceeds the quantity supplied of a good or service, usually because the price is for some reason below the equilibrium price in the market.
Specialists start learning		People who produce a narrower range of goods and services than they consume (also called specialized workers).
Specialization start learning		The situation in which people produce a narrower range of goods and services than they consume.
Spend start learning		Use earnings (income) to buy goods and services.
Standard of living start learning		A minimum of necessities, comforts, or luxuries held essential to maintaining a person or group in customary or proper status or circumstances.
Standard of value start learning		One of the functions of money whereby the value of goods and services is expressed in money terms (prices).
Stock start learning		A certificate reflecting ownership of a corporation.
Store of value start learning		One of the functions of money allowing people to save current purchasing power to buy goods and services in a future time period.
Substitutes start learning		Products that can replace one another such as butter and margarine.
Supply start learning		A schedule of how much producers are willing and able to sell at all possible prices during some time period.
Supply decrease start learning		A decrease in the quantity supplied at every price; a shift to the left of the supply curve.
Supply increase start learning		An increase in the quantity supplied at every price; a shift to the right of the supply curve.
Surplus start learning		The situation resulting when the quantity supplied exceeds the quantity demanded of a good or service, usually because the price is for some reason below the equilibrium price in the market.
Tariff start learning		A tax on an imported good
Taxes start learning		Required payments of money made to governments by households and business firms.
Total cost start learning		Cost of resources used in producing a product multiplied by the quantity produced.
Total revenue start learning		Selling price of a product multiplied by the quantity demanded.
Trade agreement start learning		An international agreement on conditions of trade in goods and services.
Trade-off start learning		Giving up some of one thing to get some of another thing.

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