Chapter 3 Terms

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  1. Social science that analyzes the choices people
    and governments make in allocating scarce resource.
  2. Study of small economic units, such as
    individual consumers, families, and businesses.
  3. Study of a nation’s overall economic issues, such as how
    an economy maintains and allocates resources and how a government’s policies
    affect the standards of living of its citizens
  4. Willingness and ability of buyers to purchase
    goods and services.
  5. Willingness and ability of sellers to provide
    good and services
  6. Prevailing market price at which you can buy an item.
    Equilibrium price
  7. Rewards businesses for meeting the needs and
    demands of consumers
    • Private enterprise system
    • (capitalism, market economy)
  8. Pure competition, monopolistic competition,
    oligopoly and monopoly
    Types of competition
  9. Market structure in which large numbers of
    buyers and sellers exchange homogeneous products and no single participant has
    a significant influence on price
    Pure competition
  10. Market structure in which large numbers of
    buyers and sellers exchange heterogeneous products so each participant has some
    control over price
    Monopolistic competition
  11. Market situation in which relatively few sellers
    compete and high start-up costs form barriers to keep out new competitors
  12. Market situation in which a single seller
    dominates trade in a good service for which buyers can find no close
  13. Local, state, or federal government grants
    exclusive rights in a certain market to a single firm.
    Regulated monopoly
  14. government controls determine business ownership, profits, and resource allocation to accomplish government goals rather than those set by individual firms
    planned economy
  15. economic system characterized by government ownership and operation of major industries such as communications
  16. economic system in which all property would be shared equally by the people of a community under the direction of a strong central government
  17. economic system that draws from both types of economies, to different degrees
    mixed market economy
  18. conversion of government-owned and operated companies into privately held businesses
  19. cyclical economic contraction that lasts for six months or longer
  20. relationship between the number of units produced and the number of human and other production inputs necessary to produce them
  21. sum of all goods and services produced within a country's boundaries during a specific time period, such as a year
    gross domestic product
  22. rising prices caused by a combination of excess consumer demand and increases in the costs of raw materials, component parts, human resources, and other factors of production
  23. inflation rate of an economy after energy and food prices are removed
    core inflation rate
  24. prices caused bu a combination of excess consumer demand an increases in the costs of raw materials, component parts, human resources, and other factors of production
  25. economic situation characterized by soaring prices
  26. opposite of inflation, occurs when prices continue to fall
  27. measurement of the monthly average change in prices of goods and services
    consumer price index
  28. percentage of the total workforce actively seeking work but are currently unemployed
    unemployment rate
  29. applies to members of the workforce who are temporarily not working but are looking for jobs
    frictional unemployment
  30. joblessness of workers in a seasonal industry
    seasonal unemployment
  31. people who are out of work because of the cyclical contraction in the economy
    cyclical unemployment
  32. people who remain unemployed for a long periods of time, often with little hope of finding new jobs like their old ones.
    structural unemployment
  33. government actions to increase or decrease the money supply and change banking requirements and interest rates to influence bankers willingness to make loans
    monetary policy
  34. increase the money supply
    expansionary monetary policy
  35. reducing the money supply is
    restrictive monetary policy
  36. government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general welfare of citizens and encourage economic growth
    fiscal policy
  37. organization's plan for how it will raise and spend money during a given period of time
    federal budget
  38. money owed by government spends more than the amount of money it raises through taxes
    national debt
  39. excess funding that occurs when government spends less than the amount of funds raised through taxes and fees
    budget surplus
  40. situation in which total revenues raised by taxes and fees equal total proposed government spending for the year.
    balanced budget
Card Set
Chapter 3 Terms
Introduction to Business
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