| A | B |
|---|
| Economic Questions | What to produce, How to produce, For Whom to produce |
| Traditional economy | Decisions of the past determine What, How, and For Whom to produce |
| Command economy | Government decides What, How, and For Whom to produce |
| Market economy | Consumers decides What, How, and For Whom to produce |
| Mixed economy | Economy that uses both free market and command elements |
| Mixed Market economy | Another word for mixed economy (both market and command elements) |
| Economic Goals of Free Enterprise | Security, Equity, Freedom |
| Security | Safety and well being |
| Equity | Fairness and justice |
| Freedom | freedom and independence |
| Private property | Land, property, and capital that belongs to individuals |
| Voluntary exchange | The right to trade for what is desired |
| Full Employment | When all people who are seeking work are able to obtain employment |
| Efficiency | Maximum productivity of the economy |
| Productivity | The measure of goods and services made with a set amount of resources |
| Specialization | The specific task and skills that an individual contributes to the |
| Division of Labor | The breaking down of a job into separate, smaller tasks to be performed |
| Patents | Document that gives an inventor sole rights to his or her invention |
| Copyrights | Legal protection for written or other creative work |
| Circular flow of economic activity | Relationship between factor markets and product markets |
| Factor market | Market where factors of production are bought - think factory/Individuals |
| Product market | Market where consumers spend for goods and services - think business/mall |
| Economic interdependence | The relationship between producers and consumers |
| Law of Supply | Producers will offer more goods and services for sale in markets |
| Supply schedule | A chart to indicate how different amounts of a product would be made |
| Supply curve | A graph to plot how different amounts of a product would be made |
| Law of Demand | Consumers will buy more of a good at a low price than they will at a high price |
| Demand schedule | A chart to indicate how different amounts of a product would be |
| Demand curve | A graph to plot how different amounts of a product would be |
| Law of Supply and Demand | Market prices are determined by the interaction of supply and demand |
| Equilibrium price/Market price | Price at which supply equals demand |
| Personal income | Individual earnings |
| Disposable income | Income left over after needs such as food and shelter have been paid for |
| Complimentary goods | Goods used together such as baseball bats and baseballs |
| Substitute good | Goods that can take the place of another good such as margarine and butter |
| Surplus | Having too much |
| Shortage | Having too little |
| Inflation | Sharp rise in prices |
| Deflation | Decline in the prices of goods and services |
| Wage and price control | Government regulations about wages and prices in the market |
| Minimum wage | Government-required floor on wages covering most but not all businesses |
| Interest rates | Percentage rate at which money is borrowed |
| Trickle-down effect | Theory that when big businesses gets tax cuts, increased money for |
| Supply side economics | Economic school that emphasizes tax cuts and incentives for businesses |
| Buyers and Sellers | Participants in the market economy |
| Monopoly | Market with many buyers but only one seller |
| Oligopoly | Market with a small number of sellers |
| Competitive market | Market where businesses complete actively for market share |
| Mergers | Joining of two or more companies or corporations |
| Horizontal merger | One business buying another business of the same kind |
| Vertical merger | Company purchasing the companies that deliver its supplies and |
| Conglomerates | Large corporation owning many different kinds of businesses |
| Multinational Conglomerates | Large corporation of many different companies in different countries |
| Types of Business | Sole proprietorship, Partnership, Cooperative, Corporation |
| Sole Proprietorship | Form of business organization with a single owner |
| Partnership | Form of business organization run by general partners |
| Unlimited liability | A situation in which the owner of a sole proprietorship or partnership |
| Limited life | A situation in which the ownership of a sole proprietorship or partnership |
| Corporation | Kind of business organization that must file papers with the state |
| Limited liability | Restricted responsibility for a company's debts |
| Unlimited life | Legal term indicating that corporations can last forever |
| Stock | Way of raising capital by businesses giving stock holders ownership |
| Stock market | The marketplace where securities are bought and sold |
| Dividend | Money paid to stockholders from business profits |
| Bond | Borrowing money on a promise to repay a set amount by a later date |
| Cooperative | Organization whose members work together to benefit themselves |
| Franchise | Authority to sell a company's goods or services in a certain place |
| Small Business Administration | A federal agency that helps people start businesses and buy franchises |
| Organized Labor | Workers negotiating through craft,industrial, or professional Unions |
| Craft Union | Union whose members all share the same skill, such as electricians |
| Industrial Union | Union that organizes the workers from one industry without regard to |
| Labor Union | Organization representing the interests of workers in collective bargaining |
| Collective Bargaining | Workers and management negotiating to settle their disputes |
| Labor | Workers, one of the four factors of production |
| Management | Ownership or supervision within a company. |
| Strike | Workers walking off the job and trying to shut down a company |
| Lockout | When employers bar employees from coming to work; sometimes |
| Mediation | Attempt by a third party to help resolve a conflict through negotiation |
| Arbitration | Submitting a dispute to a third party and agreeing to abide by that person's |
| Anti-trust laws | Laws that seek to preserve competition in the workplace |
| Social Security Act of 1935 | Federal law establishing the system of Social Security for retirees |
| National Labor Relations Act, 1935 | Law guaranteeing workers the right to organize and join unions |
| Fair Labor Standards Act, 1938 | Legislation that mandated the 40 hour work week and time and a half |
| Taft-Hartley Act, 1947 | Legislation banning unfair labor practices |
| Fiscal Policy | Government spending and taxation to foster economic growth and |
| Monetary Policy | Government policies to make money more or less available for borrowing |
| Tight Money | When money is less available for borrowing and investment |
| Easy Money | When money is more available for borrowing and investment |
| Time-deposit | Money in a financial institution the customer can withdraw only with |
| Demand deposit | Bank account from which withdrawals can by made by the depositor |
| Commercial Bank | Bank that offers a wide range of deposits, accounts, and loans to |
| Savings & Loan Associations | Bank that has primary focus on mortgages |
| FDIC | Federal Deposit Insurance Corporation |
| Federal Deposit Insurance Corporation | Insures bank deposits |
| Credit Unions | Nonprofit cooperative organization providing banking and financial services |
| Investment spending | Using money to make more money through economic profit |
| Capital investment | Money invested in capital goods such as tools and machinery |
| Types of Insurance | Life, Medical, Auto, Liability, Comprehensive |
| Life | Insurance to provide benefits to your family in the event of your death |
| Medical | Insurance to offset expenses to doctors or hospitals if you are ill |
| Liability | Insurance to covers damages done to another person or another person's |
| Comprehensive | Insurance that covers damage to a vehicle from vandalism, theft, |
| Types of Money | Coins, Currency, Legal tender, Check |
| Coins | Metal based money such as penny, nickel, dime, quarter |
| Currency | Money in the form of coin and paper |
| Legal tender | Money that is officially recognized |
| Check | A paper that can be used as money |
| Reserve Requirement | Tool of monetary policy; the amount the Federal Reserve requires banks |
| Functions of Money | Unit of Measure, Medium of Exchange, Store of Value, Measure of Value |
| Unit of Measure | Money records and maintains a product's value |
| Medium of Exchange | Money provides a portable means for transactions |
| Store of Value | Money can be held for future use |
| Measure of Value | Money provides a standard by which value can be communicated |
| Borrowing | Using loans or credit to obtain money with the intention of paying back |
| Credit | Borrowing money at interest |
| Collateral | Property required by a lender to secure a loan |
| Investing | Purchasing of goods or services in the hope that their value will |
| Pension Funds | Money for a person's retirement |
| Mutual Funds | Company of investors who have pooled their money into a single |
