| A | B |
|---|
| economy | the way a nation makes economic choices |
| resources | all the things used in producing goods and services |
| capital | the money needed to start and operate a business |
| land | everything on the earth that is in its natural state |
| labor | all of the people who work in the economy |
| entrepreneurship | the process of starting and managing your own business |
| factors of production | the technical term economists use for resources |
| infrastructure | the physical development of a country, including its roads, ports, sanitation facilities, and utilities, especially telecommunications |
| scarcity | the difference between wants and needs and available resources |
| command economy | the government is responsible for answering the three basic economic questions |
| market economy | economy in which there is no government involvement in economic decisions |
| capitalism | an economic system characterized by private ownership of businesses and marketplace competition |
| socialist | countries that try to reduce the differences between rich and poor |
| communist | countries that have a totalitarian form of government which runs everything |
| privatization | the process of selling government-owned businesses to private individuals |
| productivity | output per worker hour |
| Gross Domestic Product (GDP) | a measure of the goods and services produced using labor and property located in this country |
| inflation | a period of rising prices |
| Consumer Price Index (CPI) | measures the change in price over a time of some 400 specific retail goods and services used by the average urban household |
| business cycle | recurring slowdown and growth of an economy |
| prosperity | point in the business cycle when the economy flourishes |
| recession | a period of economic slowdown that lasts for two quarters, or six months |
| depression | a period of prolonged recession |
| recovery | the increase in the overall economic activity |
