Economics Chapter 3 Terms
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26 terms
Terms | Definitions |
|---|---|
 Profit Motive | the force that encourages people and organizations to improve their material well-being |
| Legal Equality | the principle that everyone has the same legal rights |
| Private Property Rights | the freedom to own and use our own property as we choose as long as we do not interfere with the rights of others |
| Free Contract | the concept that people may decide what agreements they want to enter into |
| Voluntary Exchange | the act of buyers and sellers freely and willingly engaging in market transactions |
| Competition | a business relation in which two parties compete to gain customers |
| Open Oppurtunity | the concept that everyone can compete in marketplace. |
| Interest Group | a group of people with common goals who organize to influence government |
| Disclosure Laws | requires that details of lending agreements be specified in writing |
| Public Interest | the concerns of the public as a whole |
| Macroeconomics | the study of economy-wide phenomena, including inflation, unemployment, and economic growth |
| Microeconomics | the branch of economics that studies the economy of consumers or households or individual firms |
| Gross Domestic Product | the dollar amount of all final goods and services produced within a country's borders in a year. |
| Business Cycle | recurring fluctuations in economic activity consisting of recession and recovery and growth and decline |
| Work Ethnic | belief in work as a moral good, demostrated by a willingness to perform the best of one's ability. |
| Technology | the practical application of science to commerce or industry |
| Public Good | a shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers |
| Public Sector | the part of the economy that involves the transactions of the government |
| Private Sector | the part of the economy that involves the transactions of individuals and businesses |
| Free Enterprise | an economy that relies chiefly on market forces to allocate goods and resources and to determine prices |
| Market Failure | a situation in which a market left on its own fails to allocate resources efficiently |
| Externality | the quality or state of being outside or directed toward or relating to the outside or exterior |
| Poverty Threshold | an income level below that which is needed to support families or households |
| Welfare | governmental provision of economic assistance to persons in need |
| Cash Transfers | direct payments of money to eligible poor people |
| In-Kind Benefits | goods and services provided for free or at greatly reduced prices |
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