| Term | Definition |
| Fiscal Policy | Government decisions regarding taxes citizens
must pay and the amount of money the
government spends |
| Inflation | A general rise in prices throughout the economy |
| Standard of Living | The Quality of life measured by the amount of goods and services people can buy and the leisure time they have |
| Economic Indicators | Statistical tools used to measure the condition
of the nation’s economy |
| Progressive Taxes | The wealthy pay a greater share than the less
well off |
| Money Supply | Consists of cash, checking accounts, and
travelers checks |
| Demand Deposits | Mostly checking accounts |
| Regressive Taxes | Everyone regardless of wealth pays the same
amount |
| Monetary Policy | Actions by the Federal Reserve to influence
the economy by regulating the amount of
money in circulation |
| Business Cycle | The ups and downs of the economy over a
period of time |
| Gross Domestic Product | The total value in dollars of all goods and
services produced in the country in one year |
| Recession | A period on the business cycle marked by low
economic activity, reduced profits, and rising
unemployment |
| Depression | A severe recession lasting longer than a year |
| The New Deal | Government programs instituted by Franklin
D. Roosevelt to rescue the country from the
great depression |
| 16th Amendment | Established the Federal Income Tax |
| Private Property | Property owned by individuals and businesses
without government interference |
| Competition | Rivalry between producers/sellers of goods
and services |
| Government Securities | Savings bonds, treasury notes, and treasury
bills the US sells as a way to borrow money |
| Production | The combining of human (labor), natural
(land), and capital resources along with
management to make goods and services |
| Incentives | Things that motivate or change economic
behavior |
| Federal Reserve System | The nation’s baking system designed to
regulate federal monetary policy |
| Reserve Requirement | The minimum amount of money the Federal
Reserve requires member banks to keep on
hand |
| Consumption | Using goods and services |
| Discount Rate | Interest rate charged to member banks that
borrow money from the “FED” |
