Ch. 7 T &F

Economics is the study of the production and distribution of scarce resources.

The capital market refers to money made available by banks and other lenders as loans, primarily to business firms but to consumers as well.

GDP (gross domestic product) is the total value of a nation's production of goods and services for a year.

Current dollars are valued from a particular year in order to account for changes in the value of dollars.

The Federal Reserve Board controls the supply of money and credit and interest rates.

Managerialism is control of the corporation by stockholders rather than professional managers.

A hostile takeover is the purchase of stock in a corporation by an outsider and the subsequent ousting of the prior management.

Corporate raiders are investors who arrange to purchase stock in a hostile takeover effort.

The trade deficit is the difference that results when a country exports more goods than it imports.

The trade deficit is the difference that results when a country imports more goods than it exports.

National income accounting is data collected by government that describes the nation's unemployment rate.

Congress controls the supply of money, plus credit and interest rates.

The Federal Reserve Board raises and lowers tax rates to control inflation.

Protectionism is maintaining high tariffs in order to protect domestic producers from foreign competition.

Illegal drug activity as well as unreported tops by resturants workers would both be considered part of the underground economy.

The majority of the U.S. federal debt is now owed to foreign nations.

The United States has run trade deficits every year in the 21st Century.

Social Security is the largest of all entitlement expenditures.

Supply-side economics theory argues that the government should keep marginal tax rates high to reduce the federal budget deficit.