Chapter 2 Vocabulary

  1. Economics
    The study of how society choose to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
  2. Microeconomics
    The part of economic study that looks at the behavior of people and organizations in the particular markets.
  3. Macroeconomics
    The party of economics study that looks at the operations of a nations economy as a whole.
  4. Capitalism
    An economic system in which all or most of the factors of production and distribution are privately owned and operated by others.
  5. Perfect Competition
    The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product.
  6. Monopolistic Competition
    The degree of competition in which a large number of sellers produce very similar product that buyers nevertheless perceive as different.
  7. Oligopoly
    A degree of competition in which just a few sellers dominate the market.
  8. Monopoly
    A degree of competition in which only one seller controls the total supply o product or service, and sets the price.
  9. Socialism
    An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people.
  10. Communism
    An economic and political system in which the government makes all most all the economic decisions and owns almost all the major factors of production.
  11. Free-market Economics
    Economic systems in which the market largely determines what goods and the services get produced, who gets them, and how the economy grow.
  12. Command Economics
    Economics system in which the government largely decide what goods and services will be produced, who will get them, and how the economy will grow.
  13. Mixed Economies
    Economic systems in which some allocation of resources is made by the market and some by the government.
  14. Gross Domestic Product (GDP)
    The total value of final goods and services produced in a county in a given year.
  15. Inflation
    A general rise in the prices of goods and services over time.
  16. Disinflation
    A situation in which price increase are slowing (the inflation rate is declining)
  17. Deflation
    A situation where prices are declining.
  18. Stagflation
    A situation were the economy is slowing but prices are going up anyhow.
  19. Business Cycle
    The periodic rises and falls that occur in economies over time.
  20. Recession
    Two or more consecutive quarters of decline in the GDP.
  21. Depression
    A severe recession, usually accompanied by deflation.
  22. Fiscal Policy
    The federal governments efforts to keep the economy stable by increasing or decreasing taxes or government spending.
  23. Monetary Policy
    The management of the money supply and interest rates by the Federal Reserve.
Card Set
Chapter 2 Vocabulary
Vocabulary and definitions from chapter 2