Chapter One Key Terms 2

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Chapter One Key Terms 2
2015-04-11 21:37:26

Chapter One Key Terms 2
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  1. 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
  2. inflation
    a general rise in the level of prices
  3. invisible hand
    a term created by Adam Smith to describe how an individual’s own personal gain benefits othersand a nation’s economy
  4. macroeconomics
    the study of the national economy and the global economy
  5. market economy
    • an economic system in which businesses and individuals decide what to produce and buy, and
    • the market determines quantities sold and prices
  6. market price
    the price at which the quantity demanded is exactly equal to the quantity supplied
  7. microeconomics
    the study of the decisions made by individuals and businesses
  8. mixed economy
    an economy that exhibits elements of both capitalism and socialism
  9. monetary
    • Federal Reserve decisions that determine the size of the supply of money in the nation and the
    • level of interest rates
  10. monopolistic
    • 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
  11. monopoly
    a market (or industry) with only one seller
  12. national debt
    the total of all federal deficits
  13. natural
    • an industry requiring huge investments in capital and within which any duplication of facilities
    • would be wasteful and thus not in the public interest
  14. oligopoly
    a market (or industry) in which there are few sellers
  15. perfect (or pure)
    • 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
  16. producer price
    index (PPI) an index that measures prices at the wholesale level
  17. product
    the process of developing and promoting differences between one’s products and all similarproducts
  18. productivity
    the average level of output per worker per hour
  19. profit
    what remains after all business expenses have been deducted from sales revenue
  20. recession
    two or more consecutive three-month periods of decline in a country’s GDP
  21. specialization
    • the separation of a manufacturing process into distinct tasks and the assignment of the different
    • tasks to different individuals
  22. stakeholders
    all the different people or groups of people who are affected by the policies and decisions made by an organization
  23. standard of
    • a loose, subjective measure of how well off an individual or a society is mainly in terms of want
    • satisfaction through goods and services
  24. supply
    the quantity of a product that producers are willing to sell at each of various prices
  25. sustainability
    • meeting the needs of the present without compromising the ability of future generations to meet
    • their own needs