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discount rate
the interest rate charged by the Federal Reserve on its loans to banks and other financial instititutions
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discretionary income
money left after buying necessities
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district bank
one of the 12 banks that make up the Federal Reserve System
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dividends
payments made from the earnings of a corporation to its stockholders
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division of labor
breaking down a large task into a series of small ones so that each worker completes one or a few of the steps involved
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dumping
selling the same goods for a lower price abroad than at home
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economic growth
increases in an economy's total output over a period of time
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economic indicator
a statistical measurement of the state of the economy or some important part of the economy
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economic model
any simplified statement, diagram or formula used to understand economic events
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economic rent
the amount received by property owners over and above the lowest price they would have accepted
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economics
the social science that describes and analyzes how society chooses from among scarce resources to satisfy its wants
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economic system
the approach a country uses to deal with scarcity and achieve its economic goals
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economies of scale
decrease in the unit cost of a product or service because of large-scale production
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economize
the effort to get the most out of one's resources
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elastic currency
supply of money expands and contracts with the needs of business
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elasticity of demand
measure of buyers' eagerness to acquire a good or service
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elasticity of supply
measure of how easily sellers can increase or decrease the quantity supplied
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eminent domain
the right of government to take private property, at a fair price, for public purposes
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employee involvement (EI) programs
allow workers to assume reponsibilities normally held by management
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Engel's Law
as a family's income increases, the percentage spent for necessities decreases, while the percentage spent for luxuries increases
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entrepreneur
a person who creates a business in the hope of earning a profit; also a person who organizes, manages and assumes the risks of a business enterprise
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entrepreneurship
the managerial or organizational skills needed by most firms to produce goods and services at a profit
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equation of exchange
tells us that total spending is equal to the total value of the goods and service produced by the economy MV=PQ
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equilibrium price
the price of a good or service at which the quantity demanded matches the quantity supplied
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equilibrium quantity
th number of products that would be sold at the equilibrium or market price
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excess quantity demanded
the amount of a product that could be sold at a price lower than the market price
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excess quantity supplied
the amount of a product available at a price higher than the market price
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excise tax
a tax levied on the manufacture or sale of a specific item
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expaansion
phase of the business cycle following recession when the economy beings to recover
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expenditure
the money that we spend
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esport
good or service sold to a buyer in another country
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export subsidy
a payment by a country to exporters enabling them to sell their products abroad at a lower price than at home
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external funds
funds, such as loans, that come from outside the firm
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externalities
the effects of economic activities that fall outside the market system
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factors of production
the productive resources of land, labor, capital and entrepreneurship
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Federal Advisory Council
offers advice to the Federal Reserve System on the nation's financial problems
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Federal Reserve Bank
one of 12 district banks of the Federal Reserve System
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Federal Reserve System
nation's central bank
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Federal Trade Comission
a government agency established to help prevent unfair business advertising and other trade practices
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Federal Trade Commission Act
law passed by COngress in 1914 which set up the Federal Trade Commission
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finance charge
the amount charged to use credit
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discal policy
use of the federal government's power to tax and spend to regulate economic activity
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fixed costs
costs that remain the same regardless of how much business a firm does; also called overhead
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flat tax
a tax that would eliminate most deductions and apply the same tax rate to all incomes
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foreign exchange market
place where foreign currencies are bought and sold
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fractional reserve banking
system in which banks hold a percentage of their customers' deposits and lend the rest
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franchise
a license to operate an individually owned business as if it were part of a large chain
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franchisee
one who purchases a franchise
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free enterprise
an economic system based on private ownership of property, competition, and the profit motive
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