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Economics 12th Grade
1614 Economics Study Guide
| Term/Questions | Definition |
|---|---|
| Inflation | In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. |
| Branch of the U.S. Treasury Dept. in charge of collecting taxes | The U.S. Department of the Treasury is the executive branch of the federal government that manages national finances. Treasury collects taxes through the Internal Revenue Service. |
| Microeconomics | Microeconomics is a branch of economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. |
| conglomerate | A conglomerate is a combination of multiple business entities operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company. |
| substitution effect | In economics and particularly in consumer choice theory, the substitution effect is one component of the effect of a change in the price of a good upon the amount of that good demanded by a consumer, the other being the income effect. |
| goods | goods are materials that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. |
| market economy | A market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. |
| disposable personal income | Disposable income, also known as disposable personal income (DPI), is the amount of money that households have available for spending and saving after income taxes have been accounted for. |
| a cooperative | Cooperatives are people-centred enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations. Cooperatives bring people together in a democratic and equal way. |
| expenditures | the action of spending funds. |
| financial/capital account | A financial account measures the increases or decreases in international ownership assets that a country is associated with, while the capital account measures the capital expenditures and overall income of a country. |
| human capital | Human capital is the stock of habits, knowledge, social and personality attributes embodied in the ability to perform labour so as to produce economic value. Human capital is unique and differs from any other capital. |
| Consumer Price Index (know how it works) | A Consumer Price Index measures changes in the price level of a weighted average market basket of consumer goods and services purchased by households. |
| supply & demand (be able to read and understand a supply & deman chart) | In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good. |
| elasticity | In economics, elasticity is the measurement of the proportional change of an economic variable in response to a change in another. |
| liability | In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events. |
| specialization and exchange | Specialization and Exchange. BIBLIOGRAPHY. Modern economies, whether capitalistic or socialistic, whether fully developed or not, are characterized by specialization of the means of production and by exchange of goods and services. |
| comparative advantages | The law or principle of comparative advantage holds that under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage. |
| theory of rational expectations | an economic theory that states – when making decisions, individual agents will base their decisions on the best information available and learn from past trends. |
| Which capital markets are the stock market associated with | Capital markets consist of the primary market, where new securities are issued and sold, and the secondary market, where already-issued securities are traded between investors. The most common capital markets are the stock market and the bond market. |
| What will decreasing personal tax rates do? | With lower income tax rates, they would keep more of their gross income, so effectively they have more money to spend. Higher economic growth. With lower tax rates, we could expect to see a rise in consumer spending because workers are better off. |
| demand curve | In economics, a demand curve is a graph depicting the relationship between the price of a certain commodity and the quantity of that commodity that is demanded at that price. |
| When is equilibrium present in a market? | When the supply and demand curves intersect, the market is in equilibrium. This is where the quantity demanded and quantity supplied are equal. |
| Losses and business failures | A business failure is one that closes with a financial loss to a creditor or one that is involved in court action such as receivership or reorganization. |
| the law of comparative advantage | The law or principle of comparative advantage holds that under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage. |
| When will income and living standards of a nation increase? | The level of productivity is the single most important determinant of a country's standard of living, with faster productivity growth leading to an increasingly better standard of living. |
| How does the government fund a project that creates jobs | At the most basic level, government spending reduced unemployment and thus increased tax revenues. |
| secondary effect | Effects are often classified as primary and secondary impacts. Primary effects occur as a direct result of the ground shaking, eg buildings collapsing. Secondary effects occur as a result of the primary effects. |
| free market economy | In economics, a free market is a system in which the prices for goods and services are self-regulated by the open market and by consumers. |
| Why do banks choose to borrow directly from the Federal Government? | Commercial banks borrow from the Federal Reserve primarily to meet reserve requirements when their cash on hand is low before the close of the business day. |
| economics | Economics is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. |
| scarcity | Scarcity is the limited availability of a commodity, which may be in demand in the market or by the commons. Scarcity also includes an individual's lack of resources to buy commodities. |
| partnership | A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. |
| needs | A need is something that is necessary for an organism to live a healthy life. Needs are distinguished from wants. In the case of a need, a deficiency causes a clear adverse outcome: a dysfunction or death. |
| conglomerate goods | A conglomerate is a corporation made up of a number of different, seemingly unrelated businesses. In a conglomerate, one company owns a controlling stake in a number of smaller companies which conduct business separately. |
| trade-offs | A trade-off is a situational decision that involves diminishing or losing one quality, quantity or property of a set or design in return for gains in other aspects. In simple terms, a tradeoff is where one thing increases and another must decrease. |
| microeconomics | Microeconomics is a branch of economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. |
| market equilibrium | In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the values of economic variables will not change. |
| marginal utility | In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a goods or service is the change in the utility from an increase in the consumption of that good or service. |
| laissez-faire | Laissez-faire is an economic system in which transactions between private parties are absent any form of government intervention such as regulation, privileges, imperialism, tariffs and subsidies. |
| fixed cost | In economics, fixed costs, indirect costs or overheads are business expenses that are not dependent on the level of goods or services produced by the business. |
| industrial union | Industrial unionism is a labour union organizing method through which all workers in the same industry are organized into the same union—regardless of skill or trade—thus giving workers in one industry, or in all industries. |
| central bank | A central bank is an independent national authority that conducts monetary policy, regulates banks, and provides financial services including economic research. |
| federal budget | During FY2019, the federal government spent $4.45 trillion, up $338 billion or 7.1% vs. FY2018 spending of $4.11 trillion. |
| trust funds | A trust is a three-party fiduciary relationship in which the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary. |
| municipal bond | A municipal bond, commonly known as a Muni Bond, is a bond issued by a local government or territory, or one of their agencies. It is generally used to finance public projects such as roads, and schools. |
| modified union shop | Modified Union Shop. A company that has made an agreement with a labor union stating that current employees may choose to join the union or not, but all new employees will be required to become members. |
| Lorenz Curve | In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution. |
| commodity money | Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves as well as their value in buying goods. |
| macroeconomics | Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. |
| theory of negotiated wages | Sometimes other theories are useful when explaining wage differentials. The theory of negotiated wages states that organized labor's bargaining strength is a factor that helps determines wages. |
| perfect competition | In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. |
| Internal Revenue Service | The Internal Revenue Service (IRS) is a U.S. government agency responsible for the collection of taxes and enforcement of tax laws (such as the wash sale rule). |
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