| A | B |
|---|
| Microeconomics | deals with behavior and decision making by small units, such as individual & firms |
| Macroeconomics | studies the ENTIRE economy or the economy as a WHOLE |
| proportional tax | everyone pays the same % of income tax regardless of income |
| progressive tax | wealthy people pay a higher percentage as income goes up |
| regressive tax | poor people pay a greater percentage of their overall income |
| subsidy | A government payment to individuals, businesses, or other groups to encourage or protect a certain type of economic activity |
| Inflation | special kind of economic instability dealing with increases in the level of prices |
| Deflation | a decrease in the general level of prices |
| Recession | a period of decline in the economy measured by a decline in the real GDP for 6 months |
| Money cycle | Recession and expansion are the two phases |
| Expansion | a period of recovery from Recession or Depression |
| Great Depression | The worst and most prolonged downturn of business activity in U.S. history |
| unemployed | People available for work and making a specific effort to find a job that are unable to find work |
| Gross Domestic Product (GDP) | The dollar value of final goods, services, and structures produced within a country’s national borders during a one-year period |
| deficit | spending or importing more than we sell or export |
| surplus | spending or importing less than we sell or export |
| Consumer Price Index (CPI) | the price of specific items |
| Congress | determines our nation’s fiscal policy |
