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Laissez-Faire
Philosophy that government should not interfere with business activity
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Agrarian
describes farmland or ownership of farmland
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allocate, allocation
to distribute; set aside for particular purpose
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tariff
tax placed on imported or exported products
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embargo
prohibiton on the xport or import of a product
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market
mechanism that brings together buyers and sellers of a particular good or service
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socialism
economic system in which the government owns some factors of production and has a role in determining what and how goods are produced
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communism
economic and political system in which factors of production are collectivvely owned and directed by the state
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distribution of income
how a nation's income is divided among families, individuals or other designated groups
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scarcity
not enough of something people want
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opportunity cost
the sacrfice involved in achieving something
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invisible hand
self interest guides the market
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equilibrium
balance, stable prices
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price ceiling
maximum legal price on a good or service
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subsidy
gov. payment to encourage or protect an economic activiy
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mixed market
mix of free market and gov. regulation (US)
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unfettered market
business allowed to function without gov. intervention
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market economy
system where private decisions of consumers pruducers and suppliers determine the allocation of resources
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command economy
gov. makes all economic desicions
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inflation
general rise in prices
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staglation
no economic growth and rising prices at the same time
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hyper inflation
super high inflation prices rise more than 500% per year
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fiscal policy
use of gov. spending and tax collection to improve the economy
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diminishing returns
stage of production where efficiency decreases
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factors of production
labor, land, capital, entrepeneurs
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consensus
group of people who agree about a certain idea; agreement
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entrepeneurs
someone who does something new with resources in order to make a profit
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capital
items used to produce goods and services
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financial capital
money used to produce goods and services
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utility
capactiy for a good or service to be useful and give satisfaction to someone
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price floor
the lowest legal price that can be charged for an item
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monetary policy
how the national bank manipulates the money supply and interest rates to help stabilize the economy
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surplus
situation where the supply of something is greater than what is demanded
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shortage
supply is less than the demand
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capitalist
person in control of money
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black market
market in which goods and services are sold illegally, illegal prices
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deficit
amount by which a sum of money falls short of the expected or required amount; shortage
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