Chapter One Key Terms 1

  1. barter
    • a system of exchange in which goods or services are traded directly for other goods and/or
    • services without using money
  2. business
    the organized effort of individuals to produce and sell, for a profit, the products and services thatsatisfy society’s needs
  3. business cycle
    the recurrence of periods of growth and recession in a nation’s economic activity
  4. capitalism
    • an economic system in which individuals own and operate the majority of businesses that
    • provide goods and services
  5. command
    • an economic system in which the government decides what goods and services will be
    • produced, how they will be produced, for whom available goods and services will be produced,
    • and who owns and controls the major factors of production
  6. competition
    rivalry among businesses for sales to potential customers
  7. consumer price
    index (CPI)
    • a monthly index that measures the changes in prices of a fixed basket of goods purchased by a
    • typical consumer in an urban area
  8. consumer
    goods and services purchased by individuals for personal consumption
  9. cultural (or
    differences among people in a work force owing to race, ethnicity, and gender
  10. deflation
    a general decrease in the level of prices
  11. demand
    the quantity of a product that buyers are willing to purchase at each of various prices
  12. depression
    a severe recession that lasts longer than a recession
  13. domestic system
    a method of manufacturing in which an entrepreneur distributes raw materials to various homes,where families process them into finished goods to be offered for sale by the merchantentrepreneur
  14. e-business
    • the organized effort of individuals to produce and sell, through the Internet, for a profit, the
    • products and services that satisfy society’s needs
  15. economics
    the study of how wealth is created and distributed
  16. economy
    the way in which people deal with the creation and distribution of wealth
  17. Emergency
    Stabilization Act
    a $700 billion bailout plan created to stabilize the nation’s economy and retore confidence in thebanking and financial industries
  18. entrepreneur
    a person who risks time, effort, and money to start and operate a business
  19. factors of
    resources used to produce goods and services
  20. factory system
    • a system of manufacturing in which all the materials, machinery, and workers required to
    • manufacture a product are assembled in one place
  21. federal deficit
    a shortfall created when the federal government spends more in a fiscal year than it receives
  22. fiscal policy
    • government influence on the amount of savings and expenditures; accomplished by altering the
    • tax structure and by changing the levels of government spending
  23. free enterprise
    • the system of business in which individuals are free to decide what to produce, how to produce it,
    • and at what price to sell it
  24. gross domestic
    product (GDP)
    • the total dollar value of all goods and services produced by all people within the boundaries of a
    • country during a one-year period
Card Set
Chapter One Key Terms 1
Chapter One Key Terms 1