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Objective 101
Economic Systems
| Term | Definition |
|---|---|
| Capital resources | Goods and money used in the production of goods and services |
| Command economy | Economics system in which the government owns resources and dictates what is produced |
| Competitors | Businesses that offer the same goods to the same customers |
| Consumer | Buys and uses the goods and services |
| Economic decision making | process of choosing which needs or wants will be satisfied |
| Economic resources | Means from which goods and services are produced |
| Economics | Study of the decisions made for production, distribution, and consumption of goods and services to satisfy needs and wants. |
| Entrepreneurial resources | The initiative to combine natural, human and capital resources |
| Free enterprise | Economic system which freedom to consume and produced goods and services exists |
| Freedom of choice | Opportunity to make choice of goods ans services and accept consequences of decisions |
| Goods | Items purchased to satisfy |
| Human resources | people using efforts, knowledge and skills at work to produced goods and services |
| market economy | Goods and services are owned and controlled by the people |
| Market price | The point where supply and demand are equal. |
| marketplace | anywhere goods and services exchanged hands |
| Mixed economy | combines elements of the command and market economies |
| natural resources | raw materials supplied by nature |
| Needs | Necessities required for living |
| opportunity cost | Value of the next best alternative that is forgone to produce or obtain another product |
| private property | Right to purchase, use, and discard of things of value |
| Producers | Individuals and organizations that determine which goods and services will be available for consumption |
| profit | money left after selling goods and services and cost of operating a business have been paid |
| Scarcity | Condition that exists when wants or need exceed resources available |
| Service | Activities that can be consumed at the time of purchase to satisfy needs and wants |
| Gross domestic product (GDP) | The total value of all final goods and services produced in a country during one year |
| GDP per capital | Output per person found by dividing GDP by total population |
| Unemployment rate | The portion of people in the labor force who are not working. Includes people looking for work and willing to work but unable to find a job |
| productivity | The production output in relation to a unit of input |
| personal income | salaries and wages as well as investment income and government payment to individuals |
| Retail sales | The sales of durable and non durable goods bought by consumers |
| Capital projects | Involve spending by business for land, buildings, equipment, and new products |
| Business cycle | The movement of the economy from one condition to another and back again |
| prosperity | period in which most people who want to work are working, business produce goods and services in record numbers, wages are good and the rate of GDP growth increases. |
| Recession | period in which demand beings to decrease, business lower production, unemployment begins to rise and GDP growth slows for two or more quarters of the calendar year. |
| Depression | A phase marked by a prolonged periods of high unemployment, weak consumer sales, and business failure |
| Recovery | The phase in which unemployment beings to decrease demand for goods and services increase, and GDP begins to rise again |
| Inflation | An increase in the general level of prices, In inflation, the buying power of the dollar decreases. |
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