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Reid5 Economic Basic
Reid 5 Economic Basics
Term | Definition |
---|---|
economics | study of how people meet their wants and needs |
supply | amount of a good or service that is available for use |
scarcity | having a limited quantity of resources to meet unlimited wants |
producer | person or business that makes and sells products |
opportunity cost | cost of what you have to give up when making a choice |
consumer | person or business that buys, or consumes, products |
demand | desire for a particular good or service |
incentive | factor that encourages people to behave in a certain way |
market | organized way for producers and consumers to trade goods and services |
competition | struggle among producers for consumers' money |
profit | money a company has left over after subtracting the costs of doing business |
inflation | general increase in prices |
revenue | money earned by selling goods and services and by taxes |
recession | zero or negative economic growth for six or more months in a row |
specialization | act of concentrating on a limited number of goods or activities |
traditional economy | economy in which people make economic decisions based on their customs and habits |
mixed economy | economy that combines elements of traditional, market, and command economic systems |
market economy | economy in which individual consumers and producers make all economic decisions |
command economy | economy in which the central government makes all basic economic decisions |
development | country's economic growth and quality of life |
developed country | country with a strong economy and a high quality of life |
developing country | country with a less productive economy and a lower quality of life |
gross domestic product (GDP) | total value of all goods and services produced in a country in a year |
productivity | amount of goods and services produced given the amount of resources used |
technology | practical application of knowledge to accomplish a task |
trade | exchange of goods and services in a market |
export | good or service produced within a country and sold outside the country's borders |
import | good or service sold within a country that is produced in another country |
tariff | tax on imports or exports |
trade barrier | something that keeps goods and services from entering a country |
free trade | removal of trade barriers |
budget | plan that shows income and expenses over a period of time |
saving | setting aside money for future use |
interest | price paid for borrowing money |
credit | arrangement in which a buyer can purchase something and pay for it over time |
investing | act of using money in the hopes of making a future profit |
stock | share of ownership in a country |
bond | certificate issued by a company or government promising to pay back borrowed money with interest |