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