| A | B |
|---|
| laissez faire economics | the goverment takes a hands-off policy proposed by Adam Smith |
| capitalism | individuals risk their capital for a chance to gain a profit-also known as market |
| sole proprietorship | business owned by one individual-most common form of business in the United States |
| partnership | owned by two or more people who are trying to pool their resources |
| corporation | owned by a great number of stockholders-share the profits-yet risk only what they have invested |
| stock/share | piece of ownership in a corporation |
| dividend | piece of the profit from a corporation |
| limited liability | a person only risks the amount they have invest |
| business cycle | ups and downs of the economy |
| GDP | final value of all goods and services produced in a nation each year |
| inflation | rise in the value of goods and services. A rise in inflation causes the value of money to drop |
| CPI | survey of 400 goods and services that are compared to the same goods and services over time to measure the increase or decrease in prices |
| fiscal policy | how the government taxes and spends it revenue |
| monetary policy | how the government regulates the amount of money in circulation |
| tight money policy | allows less money to be created with the economy-usually through higher interest rates |
| easy money policy | also known as loose money policy-allows more money to be created within the economy-usually through lower interest rates |
