Question | Answer |
Economics | Study of why people buy, sell, spend or save |
Goods | physical objects |
Services | work or expertise |
Producer | individuals that sell goods or services |
Consumer | individuals that purchase goods or services |
natural resources | resources from the earth |
human resources | people needed in order to produce good or service |
capital resource | tools and structures need to produce a good or service |
scarcity | a limited quality of something…it gives anything value |
opportunity cost | choices you choose whenever you make an economic decision |
free market | Capitalism: consumers determines products and prices |
command system | communism: government determines products and prices |
mixed economy | socialism: consumers and governement determine prices and products |
private property | owned by an individual or small group |
Public property | owned by the community |
competition | any one person that sells a good and service or product |
GDP | total value of all goods and services produced and sold in the U.S. |
Demand | amount of desire there is for product |
law of demand | the higher the price, the lower the demand |
supply | amount of goods and services available |
law of supply | more money to be made producing good/services, the most it will be produced |
Federal Reserve System | our nations central bank |
Discount Rate | controls how much money it costs to borrow from the Fed and much bansk will load out |
open market operations | fed can buy or sell government securities in order to help the economy get better |
reserve rate | fed determines amount of deposits banks must keep 10% |
monetary policy | influencing the amount of money in the economy |
money supply | total amount of money in the economy |
inflation | when all the prices go up, and when there is too much money in the economy |
inflationary spiral | people have lots of money. they spend less, prices go down, companies hire and pay more |
Deflation | when there is too little money in the economy |
Deflationary Spiral | people don't have money. They spend less, prices go down, and companies hire and pay less |
commercial banks | banks for large corporations |
savings bank | banks for individuals and small business' |
consumer price index | when the government "shops" for goods/services to measure if we are experiencing deflation or inflation. |
Currency | bills and coins |
Interest | fee for borrowing money |