Mercyb Economics Unit 1
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Created by:
lindatownsend on June 10, 2011
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21 terms
Terms | Definitions |
|---|---|
 Command system | government owns most property resources and economic decision making occurs through a central economic plan |
| Keynesian economics | a form of demand-side economics that encourages government action to increase or decrease demand and output |
| Deficit spending | government practice of spending more than it takes in from taxes |
| Supply side economics | the economic theory that tax cuts and business incentives will increase the supply of labor and goods and stimulate the economy |
| Laffer curve | a curved graph that illustrates the theory that, if tax rates rise beyond a certain level, they discourage economic growth, thereby reducing government revenues |
| Circular flow of the economy | The relationship between households, companies and the government |
| Macroeconomics | the branch of economics that studies the overall working of a national economy |
| Microeconomics | the study of the economic behavior and decision making of small units, such as individuals, families, and businesses |
| Mixed economic system | most resources & production are privately controlled, but there is government involvement |
| Laissez faire | idea that government should play as small a role as possible in economic affairs |
| Adam Smith | Economist who wrote Wealth of Nations; Laissez-Faire economics |
| Opportunity Cost | What is given up in a trade off |
| Entrepreneur | a person who starts up and takes on the risk of a business |
| Scarcity | limited quantities of resources to meet unlimited wants |
| Capital | assets available for use in the production of further assets |
| Competition | a business relation in which two parties compete to gain customers |
| Demand | the ability and desire to purchase goods and services |
| Free Market system | Pure capitalism, in which all economic decisions are made without government intervention. |
| Socialism | an economic system based on state ownership of property and business |
| Capitalism | an economic system based on private property and free enterprise |
| Trade Off | an exchange in which one benefit is given up in order to obtain another |
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