| A | B |
|---|
| Capitalism | private ownership and the market |
| Market | "place" where buyers and sellers meet |
| Socialism | public ownership and government decision-making |
| inflation | a general rise in prices |
| competition | business' attempt to produce at low price and high quality |
| price | cost of production + profit |
| supply | amount producer will offer at a price |
| demand | amount buyer will buy at a price |
| law of supply | a direct relationship between quantity and price |
| law of demand | an inverse relationship between quantity and price |
| deficit | spending is greater than income |
| revenue | taxes; government income |
| surplus | income is greater than expenditures |
| debt | total aomount owed; increased by deficits |
| budget | relationship between spending and income |
| CPI | measures inflation at consumer level |
| business cycles | economy moves through periods of growth and slowdown |
| productivity | units produced per worker in a given time |
| cost | pay for productive resources |
| "real" values | values without the inflation factor |
| "nominal" values | values in current dollars |
| regulation | government requirements |
| unemployment | civilian labor force without a job |
| civilian labor force | non-military persons over 16 years old; willing to work |
| BLS | Bureau of Labor Statistics; measures unemployment |
| progressive tax | higher incomes are taxed at higher percentage rate |
| regressive tax | lower incomes are taxed at higher percentage rate |
| proportional tax | all incomes are taxed at the same percentage rate |
| social insurance | "safety net" programs for economic security |
| public assistance | programs to alleviate poverty |
| equilibrium price | where supply and demand cross |
| GDP | total domestic production |
| increasing returns | more production; more productivity |
| diminishing returns | more production; less productivity |
| negative returns | less production; less productivity |
| deregulation | less government control; more competition |
| OMB | President's advisors on the budget |
| OSHA | agency for safety in the workplace |
| cost-push inflation | increased costs = higher prices |
| demand-pull inflation | "too many dollars chasing too few goods |
| structural inflation | prices rise as consumers demand "new and improved" products |
| frictional unemployment | temporary, seasonal loss of work |
| cyclical unemployment | loss of jobs caused by a recession |
| structural unemployment | new industries cause a loss of old jobs |
| product differentiation | advertising the unique qualities of a product |
| balance of trade | imports = exports |
| trade deficit | imports are greater than exports |
| trade surplus | exports are greater than imports |
| opportunity cost | cost of an economic choice |
| circular flow | interdependence of producer and consumer |
| GDP gap | difference between actual GDP and potential GDP |
| OASDI | commonly called Social Security |
| FDIC | insures depositors to $100,000 |
| FICA | Social Security tax |
| tariff | tax on imported goods |
| monopoly | one seller in the market |
| oligopoly | few sellers in the market |
| recession | rising unemployment; falling GDP |
| recovery | rising GDP; falling unemployment |
| depression | widespread unemployment; negative GDP |
