| 6681812649 | absolute advantage | the ability to produce something more efficiently | | 0 |
| 6681812650 | capital | productive equipment or machinery | | 1 |
| 6681812651 | comparative advantage | the ability to produce something with a lower opportunity cost | | 2 |
| 6681812652 | economics | a social science that studies how resources are used and is often concerned with how resources can be used to their fullest potential | | 3 |
| 6681812653 | efficiency | using resources to their maximum potential | | 4 |
| 6681812654 | labor | all human activity that is productive | | 5 |
| 6681812655 | land | all natural resources | | 6 |
| 6681812656 | law of Increasing costs | law that states that when more of a product is initially being produced, the higher the opportunity cost will be to produce still more | | 7 |
| 6681812657 | macroeconomics | economic problems encountered by the nation as a whole | | 8 |
| 6681812658 | microeconomics | economic problems faced by individual units within the overall company | | 9 |
| 6681812659 | opportunity cost | the amount of one good that must be sacrificed to obtain an alternative good | | 10 |
| 6681812660 | positive economics | economic analysis that draws conclusions based on logical deduction or induction (value judgements are avoided) | | 11 |
| 6681812661 | production possibilities curve | the combinations of two goods that can be produced if the economy uses all of its resources fully and efficiently | | 12 |
| 6681812662 | normative economies | economies involving value judgement | | 13 |
| 6681812663 | resource | anything that can be used to produce a good or service | | 14 |
| 6681812664 | allocative efficiency | term for resources being deployed to produce just the right amount of each product to satisfy society's wants | | 15 |
| 6681812665 | capitalism | an economic system where supply and demand determine prices | | 16 |
| 6681812666 | circular flow diagram | diagram that shows how households and firms are related by the exchange of resources and products | | 17 |
| 6681812667 | command economy | economy in which the central government dictates what will or will not be produced and who gets what | | 18 |
| 6681812668 | the law of demand | law that states that when the price of a product increases, the quantity demanded decreases, ceteris paribus | | 19 |
| 6681812669 | law of supply | law that states that when the price of a product increases, the quantity supplied increases, ceterus paribus | | 20 |
| 6681812670 | mixed economy | a blend of government commands and capitalism | | 21 |
| 6681812671 | consumption expenditures | all the goods and services sold to households | | 22 |
| 6681812672 | disposable personal income (DPI) | the income of households after taxes have been paid | | 23 |
| 6681812673 | government expenditures | goods and services sold to governments | | 24 |
| 6681812674 | gross domestic product (GDP) | dollar value of production within a nation's borders | | 25 |
| 6681812676 | intermediate sales | sales to firms that will incorporate the item into their final product | | 26 |
| 6681812678 | investment expenditures | expenditures by businesses on plants and equipment plus the change in business inventories | | 27 |
| 6681812679 | national income (NI) | the income earned by households and profits earned by firms after subtracting depreciation and indirect business taxes | | 28 |
| 6681812681 | net exports | exports minus imports | | 29 |
| 6681812682 | personal income (PI) | income received by households | | 30 |
| 6681812683 | real GDP | GDP adjusted for the price changes | | 31 |
| 6681812684 | underground economy | all the illegal production of goods and services and legal production that does not pass through markets | | 32 |
| 6681812685 | GDP | C+I+G+X | | 33 |
| 6681812686 | GDP per capita | GDP/population | | 34 |
| 6681812687 | consumer price index (CPI) | measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services | | 35 |
| 6681812688 | cyclical unemployment | loss of jobs by individuals during a recession and the corresponding slowdown in production | | 36 |
| 6681812689 | Fisher equation | Nominal Interest Rate= Real Interest Rate + Expected Inflation | | 37 |
| 6681812690 | frictional unemployment | state of being out of work because the person is in between jobs | | 38 |
| 6681812691 | GDP deflator or Price Index | measure of the level of prices in the economy | | 39 |
| 6681812693 | inflation | a sustained rise in most prices in the economy | | 40 |
| 6681812697 | structural unemployment | state of being out of work because the economy is structured, or set up, to a person's disadvantage | | 41 |
| 6681812698 | unemployment rate | the number of unemployed persons divided by the labor force | | 42 |
| 6681812699 | CPI | (Total Cost this Period/Total Cost Base Period) x 100 | | 43 |
| 6681812700 | Inflation rate | [(this period CPI-previous period CPI)/previous period CPI] x 100 | | 44 |
| 6681812702 | Real GDP | (GDP/GDP deflator) x 100 | | 45 |
| 6681812703 | Nominal Interest Rate | Real Interest Rate + Expected Inflation | | 46 |
| 6681812704 | Unemployment Rate | Number of unemployed/civilian labor force | | 47 |
| 6681812705 | aggregate demand | the demand for all goods and services by all households, business, governments, and foreigners | | 48 |
| 6681812706 | aggregate supply | the supply of all goods and services by all producers in the economy | | 49 |
| 6681812708 | business cycle | a wave of economic activity comprised of an expansion and a recession | | 50 |
| 6681812709 | classical economic theory | the predominant paradigm in economic analysis from about 1800 until 1930, based on Say's Law | | 51 |
| 6681812711 | equilibrium price level | the price level that equates aggregate supply and aggregate demand, the average level of prices in the economy | | 52 |
| 6681812712 | equilibrium quantity | the amount of output that results in no shortage or surplus, the amount of goods and service bought and sold in the economy | | 53 |
| 6681812713 | recovery | a sustained improvement in economic activity | | 54 |
| 6681812714 | Keynesian theory | theory that opposes Classical theory by emphasizing the short run and focusing on economies that are operating below full capacity | | 55 |
| 6681812715 | marginal propensity to consume (MPC) | idea that given an extra dollar, how much is spent? | | 56 |
| 6681812716 | multiplier | an initial change in spending in the economy that will have a magnified, or multiplied, effect on income | | 57 |
| 6681812717 | recession | a sustained decline in economic activity | | 58 |
| 6681812718 | Say's Law | theory that supply creates its own demand | | 59 |
| 6681812719 | MPC | change in spending / change in income | | 60 |
| 6681812720 | Spending Multiplier | 1/MPS | | 61 |
| 6681812721 | total change in income | Initial Change in Spending x Multiplier | | 62 |
| 6681812722 | automatic stabilizers | government policies already in place that promote deficit spending during recessions and surplus budgets during expansions | | 63 |
| 6681812723 | crowding out | the increase in interest rates and subsequent decline in spending that occurs when the government borrows money to finance a deficit | | 64 |
| 6681812724 | deficit | situation that exists when government spending exceeds tax revenues | | 65 |
| 6681812725 | fiscal policy | changes in government spending and taxes to fight recessions or inflations | | 66 |
| 6681812726 | inflationary gap | what occurs when the equilibrium quantity of output is above potential output | | 67 |
| 6681812727 | Phillips curve | the inverse relationship between inflation and unemployment | | 68 |
| 6681812728 | rational expectations | the idea that households and businesses will make economic decisions that might offset intended policy goals | | 69 |
| 6681812729 | recessionary gap | what occurs when the equilibrium quantity of output is below potential output | | 70 |
| 6681812730 | stagflation | term used to describe the situation when the economy experiences inflation and a recession simultaneously | | 71 |
| 6681812731 | surplus | spending by the government that is less than tax revenues | | 72 |
| 6681812732 | change in real GDP | Initial Change in Spending x Multiplier | | 73 |
| 6681812734 | currency | coins and paper money | | 74 |
| 6681812735 | discount rate | the rate of interest the FED charges when it makes loans to depository institutions | | 75 |
| 6681812736 | excess reserves | the amount of any deposit that does not have to be held aside and may be used to make loans and buy investments | | 76 |
| 6681812737 | The Federal Reserve | the central bank of the United The United States | | 77 |
| 6681812738 | fiat money | money that is not backed by any precious commodity | | 78 |
| 6681812740 | liquidity | the ability to turn an asset into cash rapidly and without loss | | 79 |
| 6681812741 | M1 | currency, transaction accounts, and travelers' checks | | 80 |
| 6681812742 | M2 | M1 plus savings accounts, certificates of deposit, and other liquid assets | | 81 |
| 6681812743 | money | anything that society generally accepts in payment for a good or service | | 82 |
| 6681812744 | money multiplier | 1/reserve requirement, the multiple by which the money supply will change because of a change in bank reserves | | 83 |
| 6681812745 | open market operations | activities in which the FED buys and sells government securities in the secondary market | | 84 |
| 6681812746 | required reserves | the amount of any deposit that must be held aside and not used to make loans or buy investment | | 85 |
| 6681812747 | reserve requirement | the percentage of any deposit that must be held aside and not used to amke loans or buy investments | | 86 |
| 6681812751 | money multiplier | 1/ Reserve Requirement | | 87 |
| 6681812752 | change in money supply | Money Multiplier x Change in Bank Reserves | | 88 |
| 6681812756 | federal open market committee (FOMC) | a committee within the FED that designs and executes the particular of monetary policy | | 89 |
| 6681812757 | monetarist | one who believes that changes in the money supply have a profound effect on the economy | | 90 |
| 6681812759 | monetary policy | changes in the money supply to fight recessions or inflations | | 91 |
| 6681812761 | velocity of money | describing the number of times the typical dollar of M1 or M2 is used to make purchases during a year | | 92 |
| 6681812762 | equation of exchange | M x V = P x Q | | 93 |
| 6681812764 | economic growth | growth of output usually measured by the percentage change in real GDP or real GDP per capita | | 94 |
| 6681812765 | human capital | the skill and knowledge embodied in the labor force | | 95 |
| 6681812767 | potential GDP | the amount that can be produced using resources fully and efficiently | | 96 |
| 6681812770 | Rule of 70 | years it takes a variable to double =70/the annual growth rate of the variable | | 97 |
| 6681812771 | appreciation | the increase of the value of a currency in terms of another currency | | 98 |
| 6681812772 | balance of payments | an accounting of the funds that flow in and out of a country comprised of the capital account and the current account | | 99 |
| 6681812773 | balance of trade | a nation's exports minus its imports | | 100 |
| 6681812774 | financial account | a portion of the balance of payments comprised of foreign purchases of US assets minus US purchases of foreign assets, plus the change in official reserves | | 101 |
| 6681812775 | closed economy | a hypothetical economy with no foreign trade | | 102 |
| 6681812776 | current account | a portion of the balance of payments comprised of the trade balance, net investment income, and net transfers | | 103 |
| 6681812777 | depreciation | the decrease of the value of a currency in terms of another currency | | 104 |
| 6681812779 | exchange rate | the value of one country's currency in terms of another's | | 105 |
| 6681812781 | import quota | a limit on the amount of a product that can be imported | | 106 |
| 6681812782 | import tariff | a tax on a specified import product | | 107 |
| 6681812788 | official reserves | government's holdings of foreign currencies | | 108 |
| 6681812789 | open economy | an economy with foreign trade | | 109 |
| 6681812790 | trade deficit | excess of a nation's imports over its exports | | 110 |
| 6681812791 | trade surplus | excess of a nation's exports of over its imports | | 111 |
| 6681812792 | balance of payments | current account +capital account | | 112 |