| A | B |
|---|
| Gross Domestic Product | measure of the value of all goods and services produced in a year |
| monopoly | an industry controlled by one corporation |
| fiscal policy | plan created by President and passed by Congress; detemines taxes and spending by government |
| monetary policy | government's plan for maintaining stable money supply |
| free enterprise | market economy; capitalism; decisions are made by indviduals and business with little/no government interference |
| competitive market | industry in which their are many options for consumers from many different producers |
| expenditures | money spent by government |
| revenue | money recieved by government |
| law of diminishing returns | loss of profit that occurs when investment is made in only one factor of production |
| law of supply | as price increases, the quantity produced increases |
| law of demand | as price increases, the quantity purchased decreases |
| productivity | measure of the amount produced by a business in a given period of time; can be increased by specialization, division of labor, education, technonloy |
| specialization | occurs when business, state, or country focuses on producing one thing better than anyone else |
| division of labor | occurs when production is broken down into small steps to be performed by different workers; assemby line |
| factors of production | land, labor, capital, entreprenueuship |
| land | natural resources used in production of goods/services |
| labor | workers |
| capital | manufactured (man made) goods used in production of goods and services |
| entrepreneurship | starting a new business; coming up with innovative new way to do something |
| federal reserve system | maintains steady money supply by controlling interest rates |
| disposable personal income (DPI) | measure of amount of money people have after taking out taxes |
