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Business Ess. Chpt 1
| Term | Definition |
|---|---|
| shortage | situation in which quantity demanded exceeds quantity supplied |
| private enterprise | economic system that allows individuals to pursue their own interests without undo governmental restriction |
| competition | vying among businesses for the same resources or customers |
| perfect competition | market or industry characterized by numerous small firms producing an identical product |
| monopolistic competition | market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors |
| oligopoly | market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products |
| monopoly | market or industry in which their is only one producer that can therefore set the prices of its products |
| natural monopoly | industry in which one company can most efficiently supply all needed goods or services |
| economic indicator | a statistic that helps access the performance of an economy |
| business cycle | short term pattern of economic expansions and contractions |
| aggregate output | the total quantity of goods and services produced by an economic system during a given period |
| standard of living | the total quantity and quality of goods and services people can purchase with the currency used in their economic system |
| gross domestic product (GDP) | total value of all goods and services produced within a given period by a national economy through a domestic of production |
| gross national product (GNP) | total value of all goods and services produced by a national economy within a given period regardless of where the factors of productions are located |
| real GDP (gross domestic product) | GDP adjusted to account for changes in currency values and price changes |
| nominal GDP (gross domestic product) | GDP measured in current dollars or with all components valued at current prices |
| purchasing power parity | the principle that exchange rates are set so that the prices of similar products in different countries are about the same |
| productivity | a measure of economic growth that compares how much a system produces with the resources needed to produce it |
| balance of trade | the economic value of all the products that a country exports minus the economic value of all the products it imports |
| national debt | the amount of money the government owes it creditors |
| stability | condition in which the amount of money available in an economic system in the quantity of goods and services produced in it are growing about the same rate |
| inflation | occurs when widespread increases occur throughout an economic system |
| consumer price index (CPI) | a measure of the prices of typical products purchased by consumers living in urban areas |
| unemployment | the level of joblessness among people actively seeking work in an economic system |
| recession | a period during which aggregate output, as measured by GDP, declines |
| depression | a prolonged and deep recession |
| fiscal policies | policies used by a government regarding how it collects and spends revenue |
| monetary policies | policies used by a government to control the size of its money supply |
| stabilization policy | government economic policy intended to smooth out fluctuations in output and unemployment and to stabilize prices |
Created by:
shelaynecarter
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