- barriers to entry
- Factors, such as technological or legal conditions, that prevent new firms from competing equally with an existing firm.
- business
- An organization that strives for a profit by providing goods and services desired by its customers.
- business cycles
- Upward and downward changes in the level of economic activity.
- capital
- The inputs, such as tools, machinery, equipment, and buildings, used to produce goods and services and get them to the customer.
- capitalism
- An economic system based on competition in the marketplace and private ownership of the factors of production (resources); also known as the private enterprise system.
- circular flow
- The movement of inputs and outputs among households, businesses, and governments; a way of showing how the sectors of the economy interact.
- communism
- An economic system characterized by government ownership of virtually all resources, government control of all markets, and economic decision-making by central government planning.
- consumer price index (CPI)
- An index of the prices of a “market basket” of goods and services purchased by typical urban consumers.
- contractionary policy
- The use of monetary policy by the Fed to tighten the money supply by selling government securities or raising interest rates.
- cost-push inflation
- Inflation that occurs when increases in production costs push up the prices of final goods and services.
- costs
- Expenses incurred from creating and selling goods and services.
- crowding out
- The situation that occurs when government spending replaces spending by the private sector.
- cyclical unemployment
- Unemployment that occurs when a downturn in the business cycle reduces the demand for labor throughout the economy.
- demand
- The quantity of a good or service that people are willing to buy at various prices.
- demand curve
- A graph showing the quantity of a good or service that people are willing to buy at various prices.
- demand-pull inflation
- Inflation that occurs when the demand for goods and services is greater than the supply.
- demography
- The study of people’s vital statistics, such as their age, gender, race and ethnicity, and location.
- economic growth
- An increase in a nation’s output of goods and services.
- economic system
- The combination of policies, laws, and choices made by a nation’s government to establish the systems that determine what goods and services are produced and how they are allocated.
- economics
- The study of how a society uses scarce resources to produce and distribute goods and services.
- entrepreneurs
- People who combine the inputs of natural resources, labor, and capital to produce goods or services with the intention of making a profit or accomplishing a not-for-profit goal.
- equilibrium
- The point at which quantity demanded equals quantity supplied.
- expansionary policy
- The use of monetary policy by the Fed to increase, or loosen, the growth of the money supply.
- factors of production
- The resources used to create goods and services.
- federal budget deficit
- The condition that occurs when the federal government spends more for programs than it collects in taxes.
- Federal Reserve System (the Fed)
- The central banking system of the United States.
- fiscal policy
- The government’s use of taxation and spending to affect the economy.
- frictional unemployment
- Short-term unemployment that is not related to the business cycle.
- full employment
- The condition when all people who want to work and can work have jobs.
- goods
- Tangible items manufactured by businesses.
- gross domestic product (GDP)
- The total market value of all final goods and services produced within a nation’s borders each year.
- inflation
- The situation in which the average of all prices of goods and services is rising.
- knowledge
- The combined talents and skills of the workforce.
- knowledge workers
- Workers who create, distribute, and apply knowledge.
- macroeconomics
- The subarea of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products.
- market structure
- The number of suppliers in a market.
- microeconomics
- The subarea of economics that focuses on individual parts of the economy, such as households or firms.
- mixed economies
- Economies that combine several economic systems; for example, an economy where the government owns certain industries but others are owned by the private sector.
- monetary policy
- A government’s programs for controlling the amount of money circulating in the economy and interest rates.
- monopolistic competition
- A market structure in which many firms offer products that are close substitutes and in which entry is relatively easy.
- national debt
- The accumulated total of all of the federal government’s annual budget deficits.
- not-for-profit organization
- An organization that exists to achieve some goal other than the usual business goal of profit.
- oligopoly
- A market structure in which a few firms produce most or all of the output and in which large capital requirements or other factors limit the number of firms.
- perfect (pure) competition
- A market structure in which a large number of small firms sell similar products, buyers and sellers have good information, and businesses can be easily opened or closed.
- producer price index (PPI)
- An index of the prices paid by producers and wholesalers for various commodities, such as raw materials, partially finished goods, and finished products.
- productivity
- The amount of goods and services one worker can produce.
- profit
- The money left over after all costs are paid.
- purchasing power
- The value of what money can buy.
- pure monopoly
- A market structure in which a single firm accounts for all industry sales of a particular good or service and in which there are barriers to entry.
- quality of life
- The general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time.
- recession
- A decline in GDP that lasts for at least two consecutive quarters.
- relationship management
- The practice of building, maintaining, and enhancing interactions with customers and other parties to develop long-term satisfaction through mutually beneficial partnerships.
- revenue
- The money a company receives by providing services or selling goods to customers.
- risk
- The potential to lose time and money or otherwise not be able to accomplish an organization’s goals.
- savings bonds
- Government bonds issued in relatively small denominations.
- seasonal unemployment
- Unemployment that occurs during specific seasons in certain industries.
- services
- Intangible offerings of businesses that can’t be held, touched, or stored.
- socialism
- An economic system in which the basic industries are owned either by the government itself or by the private sector under strong government control.
- standard of living
- A country’s output of goods and services that people can buy with the money they have.
- strategic alliance
- A cooperative agreement between business firms; sometimes called a strategic partnership.
- structural unemployment
- Unemployment that is caused by a mismatch between available jobs and the skills of available workers in an industry or region; not related to the business cycle.
- supply
- The quantity of a good or service that businesses will make available at various prices.
- supply curve
- A graph showing the quantity of a good or service that businesses will make available at various prices.
- technology
- The application of science and engineering skills and knowledge to solve production and organizational problems.
- unemployment rate
- The percentage of the total labor force that is not working but is actively looking for work.