| A | B |
|---|
| aggregate demand | Total demand for an economy's goods and services |
| business cycle | Periods of expansion and contraction in economic activities |
| capital goods | All materials used in the production of goods and services |
| consumption | The process or activity of using goods and services |
| contraction | The third phase of the business cycle characorized by decreased demand for goods and services, rising unemployment, increased saving by consumers, and reduced sales and profits for businesses |
| depression | A severe, long lasting recession charactorized by high rates of unemployment and business failure |
| distribution | The process or activity by which income is divided among resource owners and producers |
| durable goods | Goods that are intended to last a relatively long period of time (cars, houses, TV's) |
| economic activities | Consumption, production, exchange, and distribution |
| exchange | The process of trading one good/service for another |
| expansion | The first stage of the business cycle charactorized by increased spending and borrowing, increased demand for goods and services, increased employment rates, and decreased interest rates on loans |
| Federal Reserve System | The regulatory agency of the monetary system of the United States which supervises banks and provides banking services for US Treasury; considered the central bank of the US |
| Gross National Product | The final total value of all goods and services produced in the economy in a year's time |
| inflation | A rapid rise in prices usually occurring when demand exceeds supply |
| innovation | Something new, such as a new product, strategy, or process |
| Money supply | The total quantity of money which exists at one time in a nation |
| Peak | The second phase of the business cycle which is considered the high point of economic activity; during this phase, demand for goods and services begins to exceed the production capacities of producers |
| Production | The process or activity of producing goods and services |
| recession | A six-month contraction in economic activity |
| Standard of Living | The style in which families/individuals live; an indication of the level of material well being |
| Trough | The forth phase of the business cycle, which is considered the low point of economic activity; charactorized by high rates of unemployment and business failures |
