| A | B |
|---|
| economy | the way a nation makes economic choices |
| resources | factors of production |
| land | that found in the earth or in the seas |
| labor | full and parttime workers |
| capital | money needed to start/operate a business, factories, office buildings, computers, tools too |
| entrepreneurship | skills of people who are willing to risk their time and money to run a business |
| infrastructure | the physical development of the land, roads, ports sanitation facilities, utilities, telecommunications |
| underdeveloped countries | have resources, but not the capital or skilled labor to develop them |
| scarcity | the difference between wants and needs and available resources |
| how to use limited resources: | what goods should be produced, how, and for whom |
| market economy | no government involvement in economic decisions |
| command economy | government controls factors of production and makes all decisions about their use |
| mixed economy | some government involvement through mandatory laws and regulations, labor laws and social programs |
| capitalism | characterized by private ownership of business and marketplace competition |
| free enterprise system | capitalism |
| socialist political system | increased govt. involvement, keeps prices low for all people and provides employment for many |
| socialism | "cradle to grave" |
| socialistic countries | Canada, Germany, Great Britain, Sweden, and Australia |
| communist | government runs everything |
| communist countries | cuba and north korea |
| capitalist countries | USA and Japan |
| privatization | process of selling govt-owned businesses to private individuals |
| productivity | output per worker hour that is measure over a defined period of time, week, month or year |
| three goals of economy | stable prices, low unemployment, high productivity |
| Gross domestic product | meausre of goods and services produced using labor and property located in this country |
| inflation | refers to rising prices, double digit devastates economy, does not have its same value as in lower inflation |
| consumer price index | measures change in price over time of some 400 retail goods and service used by average americans |
| producer price index | measures wholesale price levels in economy, as prices drop, consumers will pay less |
| consumer confidence polls | affected by retail sales, housing starts, truck and auto sales |
| business cycle | where economy grows and at other times slows down |
| prosperity | expansion, when economy is flourishing |
| recession | economic slowdown, reduced workforces and consumer las less to spend |
| depression | period of prolonged recession, impossible to find a job, businesses shut down |
| recovery | increase in overall economic activity, business increases, jobs increase, and demand for goods increases |
