| A | B |
|---|
| Absolute Advantage | when a country can produce a good at a lower cost using the same or reduced amount of resources. |
| Appreciation | an increase in the value of an asset. |
| Appropriations | Money set aside in a budget for specific purposes. |
| Antitrust Legislation | laws that forbid anti-competitive behavior and promote competition. |
| Balance of Trade | the relationship between the value of a country’s exports and the value of its imports. |
| Bonds | type of investment in which you lend or load money to a company |
| Budget | a tool for managing money to achieve short and long term goals; a budget includes a list of all types of income and expenses over the course of a time period |
| Budget Deficit | occurs when more money is spent that is received. A budget surplus occurs when more money comes in than is spent. |
| Budget Surplus | a situation when income exceeds expenditures. |
| Business Cycle | movement |
| Capital Goods | machines and tools used in production of other goods. |
| Capital Productivity | the tools and supplies used to produce a product. |
| Cartel | a group of competitive firms that collude and work together to control pries in and industry. |
| Charter | the legal authorization to conduct business in a particular state. |
| Circular Flow of Economic Activity | a model that shows the relationship between households and businesses in a free market economy. |
| Collusion | occurs when competing firms in an industry work together to control prices and increase profits. |
| Command Economy | economic system where economic decisions are made solely by the government. |
| Comparative Advantage | when a country can produce a good with a lower opportunity cost than another country. |
| Competition | a rivalry between two or more businesses trying to sell products to the same customer or market. |
| Consumer Price Index | a measurement used by economics to measures average prices of a market basket of consumer goods and services. |
| Consumer Product Safety Commission | a governmental agency responsible for setting and monitoring safety standards for all consumer products. |
| Consumer Sovereignty | a characteristic of a market economy that gives consumers the power to decide what businesses produce. |
| Consumer Surplus | when you can buy things for less than what you were actually willing to pay. |
| Contracts | an agreement between two or more parties that is enforceable in court. |
| Cooperative | a group of people who pool their resources in order to buy and sell more efficiently than they could independently. |
| Corporation | a legal entity with an existence that is separate from the people who create |
| Cyclical Unemployment | unemployment that is caused by a recession or downturn in business activity; caused by a decrease in total spending. |
| Depreciation | decrease in value. |
| Dividends | distribution of the after-tax earnings that are distributed to company’s shareholders. |
| Economies of Scale | occurs when the average cost of production decreases as the producer grows larger. |
| Embargo | a law that cuts off most or all trade with a specific country. |
| Eminent Domain | the right of the government to take private property for public use and compensate the property owner. |
| Environmental Protection Agency | a governmental agency responsible for enforcing laws about pollution and hazardous materials in order to protect the environment. |
| Exchange Rate | the amount of currency it takes to buy one unit of currency in another country. |
| Exports | goods and services created in one nation and sold to another nation. |
| Factor Market | resources that businesses use to produce their products related to the factors of production: land |
| Federal Communications Commission | a governmental agency responsible for the regulating communications industry. |
| Federal Reserve System | the central bank and monetary authority in the U.S |
| Federal Trade Commission | a governmental agency responsible for maintaining competition and informing consumers in our free market system. |
| Fiscal Policy | a method of taxing and spending used by the government in order to influence the economy. |
| Fiscal Year | a twelve-month period used for financial purposes that doesn’t necessarily begin on January first. |
| Fixed Costs | anticipated expenses that are the same each month and usually require payment around the same time each month; examples include house payments |
| Food and Drug Administration | a governmental agency responsible for the safety of our foods |
| Foreign Exchange Market | a market in which currencies of different countries are bought and sold. |
| Franchise | a type of business organization that is part of a larger parent company; the franchise is independently owned and operated but with rules and regulations mandated by the parent company. |
| Frictional Unemployment | unemployment resulting from workers who are entering the workforce |
| General Agreement on Tariffs and Trade | agreement that set up rules and policies for international trade among the 150 member nations at the end of World War II. Replaced by the World Trade Organization. |
| General Partner | a type of owner in a partnership who is responsible for the day-to-day operations and who has limited liability for any debts of the business. |
| Globalization | the increasing interconnection of producers |
| Government Regulation | the act of controlling business behavior through a set of rules or laws. |
| Gross Domestic Product | monetary value of final goods and services produced within a country for a specific time period (normally one year) |
| Households | consumers as individuals or in groups living under one roof. |
| Human Capital | the knowledge and skills a person possesses. |
| Imports | goods and services brought into a nation from another nation. |
| Inflation | an increase in the overall level of prices for goods. |
| Innovation | the act of turning inventions and ideas into marketable products. |
| Input | resources that go into producing a product. |
| Intermediate Goods | materials or resources that will be transformed into another form or used for another product. |
| Labor Productivity | the amount of goods or services produced by a worker in an hour. |
| Limited Liability Company | a type of business that combines limited liability and single taxation without limits on foreign investors. |
| Limited Liability Partnership | a type of business that allows limited partners to take more of a role in running the partnership without the worry of unlimited liability. |
| Limited Partner | a type of owner in a partnership who invests money in the business but who does not contribute to the actual running of the business and whose liability is limited to the amount invested. |
| Market Economy | economic system where economic decisions such as pricing are solely guided by the citizens with minimal interaction by the government. |
| Merger | when two or more companies combine to form a single |
| Mixed Economy | economic system where economic decisions are made by both the citizens and the government. |
| Monetary Policy | the process by which the monetary authority of a country controls the money supply in order to influence the economy. |
| Monopolistic Competition | a combination of a monopoly and perfect competition due to product differentiation. |
| Monopoly | a firm with no competitors within its industry. |
| National Debt | the total amount of money owed by the federal government; calculated by subtracting the total federal deficits from the total surpluses. |
| National Monopoly | a firm that can serve an entire market at a lower cost than two or more firms should. |
| Non-Profit Organizations | a business that is set up as a tax free organization whose profits are returned to the organization to further its mission. |
| Occupational Safety and Hazards Administration | a governmental agency responsible for worker safety. |
| Oligopoly | a type of competitive market with only a small number of firms who control the industry. |
| Output | finished goods and services |
| Partnership | a business that is owned and operated by two or more people who share the work and the profits or losses. |
| Patent Laws | another name for intellectual property rights laws; laws that give ownership rights to inventors for their creations. |
| Perfect Competition | occurs when there are many firms within the same industry that are producing the same |
| Personal Property Rights | the owners legal authority to use a resource or to change others for its use. |
| Private Corporations | business whose shares are not traded publicly on the stock market. |
| Producer Surplus | the extra money businesses get when they can sell their products for more than their lowest acceptable price. |
| Product Differentiation | products in an industry that are similar but slightly different than the competitors’ products; each product offers something that other competitors’ products don’t. |
| Product Market | the act of buying goods and services. |
| Productivity | a measure of the amount of output based on the amount of inputs used. |
| Profit | total sales minus total costs. |
| Public Corporations | businesses that sell stock |
| Public Disclosure Laws | legislation that requires businesses to reveal product info in order to protect consumers and promote competition. |
| Quota | a legal limit placed on the amount of a specific imported good. |
| Recession | a decline in the economy that lasts at least six months. |
| Revenue | the amount of money received from sales. |
| S Corporation | a type of business that offers limited liability like a corporation and single taxation like a partnership |
| Securities and Exchange Commission | a governmental agency responsible for monitoring the market for stocks and bonds in order to protect investors. |
| Specialization | method of production used when a country focuses on producing a specific good or service in order to have a greater product efficiency. |
| Standard of Living | a measurement of prosperity or wealth for the people in a country usually measured in terms of income. |
| Stockholders | people or entities that own stock in a corporation and therefore are its owners. |
| Structural Unemployment | unemployment that is caused by workers who do not possess the skills to meet the demands of the ever-changing workplace requirements; can be long-term even when economy is good. |
| Tariff | a fee charged for goods imported from another country. |
| Tax Revenues | money that the government receives from taxation. |
| Trade Agreement | agreement by a group of countries to promote trade among them. |
| Trade Barrier | any laws or action that acts to limit free trade among nations. |
| Trade Deficit | when a nation imports more goods and services than it exports. |
| Trade Surplus | when a nation exports more goods and services than it imports. |
| Traditional Economy | economic system where economic decisions are guided by customs |
| Unlimited Liability | a disadvantage of some types of businesses that may require the owner or owners to forfeit personal assets in order to pay the debts of the business. |
| U.S Bureau of Weights and Measures | a governmental agency responsible for ensuring the accuracy of commercial devices used to buy |
| U.S Department of Agriculture | a governmental agency responsible for inspecting and rating meat for freshness and quality. |
| Variable Costs | expenses that fluctuate based on the amount of products produced. |
| World Trade Organization | organization made up of a group of nations with the goal of resolving trade disputes |
