Civics and Economics Chapter 23: Government and the Economy

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private goods

goods that, when consumed by one individual, cannot be consumed by another

public goods

economics goods that are consumed collectively, such as highways and national defense

externality

the unintended side effect of an action that affects someone not involved in the action

monopoly

when the market creates a sole provider for a good or service

antitrust law

legislation to prevent new monopolies from forming and police those that already exist

merger

a combination of two or more companies to form a single business

natural monopoly

a market situation in which the costs of production are minimized by having a single firm produce the product

recall

situation in which a company pulls a product off the market or agrees to change it to make it safe

real GDP

GDP after adjustments for inflation

business cycle

alternating periods of growth and decline that the economy goes through

civilian labor force

all civilians 16 years old or older who are either working or are looking for work

unemployment rate

the percentage of people in the civilian labor force who are not working but are looking for jobs

fiscal policy

the federal governments use of spending and taxation policies to affect overall business activity

inflation

sustained increase in the general level of prices

consumer price index (CPI)

measure of change in price over time of specific group of goods and services

food stamps

government coupons that can be used to purchase food

Women, Infants, and Children (WIC) program

a program that provides help for nutrition and health care to low-income women, infants, and children up to age 5

workfare

programs that require welfare recipients to exchange some of their labor in return for benefits

progressive income tax

a tax that takes a larger percentage of higher incomes than lower incomes

Earned Income Tax Credit (EITC)

a program that gives tax credits and even cash payments to qualified workers

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