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  1. Brain drain
    The loss of the best and brightest people to other countries.
  2. Business cycles
    The periodic rises and falls that occur in economies over time. (Economic boom, Recession, Depression, Recovery)
  3. Capitalism
    An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
  4. Command Economies
    Economic systems in which the government largely decides what foods and services will be produced, who will get them, and how the economy will grow.
  5. Communism
    An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production.
  6. Consumer Price Index (CPI)
    Monthly statistics that measure the pace of inflation or deflation.
  7. Deflation
    A situation in which prices are declining.
  8. Demand
    The quantity of products that people are willing to buy at different prices at a specific time.
  9. Depression
    A severe recession, usually accompanied by deflation.
  10. Disinflation
    A situation in which price increases are slowing (the inflation rate is declining).
  11. Economics
    The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals
  12. Fiscal policy
    The federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending.
  13. Free-market economies
    Economic systems in which the market largely determines what goods and services get produces, who gets them, and how the economy grows.
  14. Gross domestic product (GDP)
    The total value of final goods and services produced in a country in a given year.
  15. Inflation
    A general rise in the prices of goods and services over time.
  16. Invisible hand
    A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all.
  17. Keynesian economic theory
    The theory that a government policy of increasing spending and cutting taxes could stimulate the economy in a recession.
  18. Macroeconomics
    The part of economics study that looks at the operation of a nation's economy as a whole.
  19. Market price
    The price determined by supply and demand.
  20. Microeconomics
    The part of economics study that looks at the behavior of people and organizations in particular markets.
  21. Mixed economies
    Economic systems in which some allocation of resources is made by the market and some by the government.
  22. Monetary policy
    The management of the money supply and interest rates by the Federal Reserve Bank.
  23. Monopolistic competition
    The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different.
  24. Monopoly
    A degree of competition in which only one seller controls the total supply of a product or service, and sets the price.
  25. National debt
    The sum of government deficits over time.
  26. Oligopoly
    A degree of competition in which just a few sellers dominate the market.
  27. Perfect competition
    The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product.
  28. Producer price index (PPI)
    An index that measures prices at the wholesale level
  29. Recession
    Two or more consecutive quarters of decline in the GDP.
  30. Resource development
    The study of how to increase resources and to create the conditions that will make better use of those resources.
  31. Socialism
    An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people.
  32. Stagflation
    A situation when the economy is slowing but prices are going up anyhow.
  33. Supply
    The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.
  34. Unemployment rate
    The number of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks.
Card Set
Ch2 terms for Bus 130
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