Ch.7 Voc.

  1. Define automatic stabilizers.
    government programs that act to counter economic cycles
  2. Define capital market.
    decisions of lenders and borrowers to make and accept loans at specified interest rates (prices)
  3. Define comparative advantage.
    the argument that countries benefit most when they concentrate on producing the goods that they are most efficient at producing
  4. Define constant dollars.
    dollars valued from a particular year in order to account for changes in the value of dollars; that is, inflation
  5. Define consumer demand.
    preferences for goods and services, expressed by willingness to pay
  6. Define corporate raiders.
    investors who arrange to purchase stock in a hostile takeover effort
  7. Define Council Economic Advisers.
    advises the president on national economic policies
  8. Define Economic Decision making.
    markets: individually, through voluntary exchange governments: collectively,through coercion
  9. Define Economic System.
    institutions and processes by which society produces and distributes scarce resources
  10. Define Economics
    the study of the production and distribution of scarce resources
  11. Define Employment Act of 1946
    pledges the federal government to promote maximum employment, production, and purchasing power
  12. Define federal deficits.
    the annual negative imbalances that occur when the government spends more than it collects
  13. Define The Federal Reserve Board.
    organization that controls the supply of money and credit and interest rates (sets monetary policy)
  14. Define fiscal policy.
    effects of government taxing, spending, and deficits on the economy
  15. Define GDP Gross Domestic Product.
    total value of nation’s production of goods and services for a year
  16. Define Gernal Agreement on Tariffs and Trade.
    a multinational agreement covering trade relations among nations
  17. Define hostile takeover.
    the purchase of stock in a corporation by an outsider and the subsequent ousting of the prior management
  18. Define inflation.
    increases in the general level of prices, not just prices of some products
  19. Define labor market.
    decisions of employers and employees to offer and accept jobs at specified wages (prices)
  20. Define managerialism.
    control of the corporation by professional managers rather than stockholders
  21. Define marginal tax rates.
    tax rates applied to additional income
  22. Define Market.
    arrangement that enables people to exchange money for goods, services, and labor
  23. Define monetary policy.
    government’s influence over the supply of money and credit and interest rates
  24. Define Natioal Debt.
    the accumulated debt of the U.S. government of over $6 trillion owed to purchasers of U.S. bonds
  25. Define national income accounting.
    data collected by government that describes the nation’s income and output
  26. Define North America Trade Agreement.
    an agreement in which the United States, Mexico, and Canada collaborated to eliminate all barriers to trade
  27. Define per capita GDP.
    gross domestic product divided by the population; a measure of economic well-being
  28. Define prices.
    allocate goods and services by willingness and ability to pay determined by consumer demand, product supply, and competition
  29. Define principal-agent problem.
    tendency for managers (agents) to operate firms to their own benefit rather than that of the owners (principals)
  30. Define private economy system.
    made up of private individuals in search of wages and profits, acting on their own, without government direction
  31. Define profits.
    monetary gains that motivate producers to satisfy consumer demand and to produce goods and services in the most efficient way possible
  32. Define protectionism.
    maintaining high tariffs in order to protect domestic producers rom foreign competition
  33. Define supply-side economics.
    government policies designed to increase the supply of goods and services through incentives to work, save, and produce
  34. Define tariffs.
    taxes on goods imported into a country
  35. Define trade deficit.
    the imbalance that results when a country imports more goods than it exports
  36. Define underground economy.
    economic activities that are unreported and not counted in GDP
  37. Define Unemployment rate.
    the percentage of the labor force not working but looking for work or waiting for a job to open
  38. Define World Trade Organization.
    an international organization that adjudicates trade disputes among countries and monitors and enforces trade agreements
Card Set
Ch.7 Voc.
Chapter 7: Power and the Economic Order