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a system of exchange in which goods or services are traded directly for other goods or services without using money
BARTER
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the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society’s needs
BUSINESS
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the recurrence of periods of growth and recession in a nation’s economic activity
BUSINESS CYCLE
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an economic system in which individuals own and operate the majority of businesses that provide goods and services
CAPITALISM
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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
COMMAND ECONOMY
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rivalry among businesses for sales to potential customers
COMPETITION
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a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
CONSUMER PRICE INDEX (CPI)
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goods and services purchased by individuals for personal consumption
CONSUMER PRODUCTS
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differences among people in a workforce owing to race, ethnicity, and gender
cultural (or workplace) diversity
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a general decrease in the level of prices
deflation
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the quantity of a product that buyers are willing to purchase at each of various prices
demand
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a severe recession that lasts longer than a typical recession
depression
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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 merchant entrepreneur
domestic system
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the organized effort of individuals to produce and sell through the Internet, for a profit, the products and services that satisfy society’s needs
e–business
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the study of how wealth is created and distributed
economics
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the way in which people deal with the creation and distribution of wealth
economy
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a person who risks time, effort, and money to start and operate a business
entrepreneur
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resources used to produce goods and services
factors of production
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a system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place
factory system
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a shortfall created when the federal government spends more in a fiscal year than it receives
federal deficit
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government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending
fiscal policy
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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
free enterprise
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the total dollar value of all goods and services produced by all people within the boundaries of a country during a one–year period
gross domestic product (GDP)
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a general rise in the level of prices
inflation
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a term created by Adam Smith to describe how an individual’s personal gain benefits others and a nation’s economy
invisible hand
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the study of the national economy and the global economy
macroeconomics
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an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices
market economy
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the price at which the quantity demanded is exactly equal to the quantity supplied
market price
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the study of the decisions made by individuals and businesses
microeconomics
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an economy that exhibits elements of both capitalism and socialism
mixed economy
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Federal Reserve decisions that determine the size of the supply of money in the nation and the level of interest rates
monetary policies
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a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors
monopolistic competition
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a market (or industry) with only one seller, and there are barriers to keep other firms from entering the industry
monopoly
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the total of all federal deficits
national debt
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an industry requiring huge investments in capital and within which any duplication of facilities would be wasteful and thus not in the public interest
natural monopoly
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a market (or industry) in which there are few sellers
oligopoly
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the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product
perfect (or pure) competition
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an index that measures prices that producers receive for their finished goods
producer price index (PPI)
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the process of developing and promoting differences between one’s products and all similar products
product differentiation
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the average level of output per worker per hour
productivity
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what remains after all business expenses have been deducted from sales revenue
profit
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two or more consecutive three–month periods of decline in a country’s GDP
recession
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an economy in which more effort is devoted to the production of services than to the production of goods
service economy
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the separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals
specialization
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all the different people or groups of people who are affected by the policies and decisions made by an organization
stakeholders
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a loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services
standard of living
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the quantity of a product that producers are willing to sell at each of various prices
supply
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meeting the needs of the present without compromising the ability of future generations to meet their own needs
sustainability
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the percentage of a nation’s labor force unemployed at any time
unemployment rate
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