| A | B |
|---|
| market | In economies, where sellers and buyers exchange goods and services. |
| The Wealth of Nations | Adam Smith's classic 1776 statement on the virtues of a free-market economy. |
| capitalism | A market economy in which the choices of private businesses and individuals regulate production and exchange. |
| private property | Land, property, and capital that belongs to individuals. |
| self-interest | The concept of working for one's own gain. |
| profit motive | Reason people go into business, to make money. |
| profit | The total income of a business after subtracting all of its costs. |
| wage | Payment for labor. |
| division of labor | Separating work into specialized tasks. |
| price | The set costs of goods and services. |
| incentive | Encouragement to purchase a good or use a service. |
| consumer sovereignty | Belief that the demand of consumers drives the economy. |
| laissez-faire | Economic philosophy that government should not regulate the economy. |
| Invisible Hand | Adam Smith's theory that a free market regulates itself to distribute goods and services fairly. |
| Communist Manifesto | Capsule statement of the philosophy of communism, written by Karl Marx and Friedrich Engels. |
| Keynesian theory | Economic view that government involvement is necessary to promote growth and stability. |
| fiscal policy | Government spending and taxation to foster economic growth and keep unemployment and prices down. |
| deficit spending | Government spending while running a budget deficit; part of a Keynesian fiscal policy. |
