Quizlet intro business ch. 2

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  1. brian drain: the loss of the best and brightest people to other countries
  2. business cycles: the periodic rises and falls that occur in all economies over time
  3. capitalism: an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit
  4. command economies: economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow
  5. communism: an economic and political system in which the state [the government] makes almost all economic decisions and owns almost all the major factors of production
  6. consumer price index [CPI]: monthly statistics that measure the pace of inflation or deflation
  7. deflation: a situation in which prices are declining
  8. demand: the quantity of products that people are willing to buy at different prices at a specific time
  9. depression: a severe recession
  10. disinflation: a situation in which price increases are slowing [the inflation rate is declining]
  11. dismal science: is a derogatory alternative name for economics; predicted that starvation would result as projected population growth exceeded the rate of increase in the food supply.
  12. economics: the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and indivduals
  13. equilibrium point: place where quantity demanded and supplied meet
  14. fiscal policy: the federal governments efforts to keep the economy stable by increasing or decreasing taxes or government spending
  15. free-market economies: economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows
  16. gross domestic product [GDP]: the total value of final goods and services produced in a country in a given year
  17. inflation: a general rise in the prices of goods and services over time
  18. invisible hand: a phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all
  19. macroeconomics: the part of economics that looks at the operation of a nation's economy as a whole
  20. market price: the price determined by supply and demand
  21. microeconomics: the part of economics that looks at the behavior of people and organizations in particular markets
  22. mixed economies: economic systems in which some allocation of resources is made by the market and some by the government
  23. monetary policy: management of the money supply and interest rates; controlled by the Federal Reserve System
  24. monopolistic competition: the market situation in which large number of sellers produce products that are very similar but that are perceived by buyers as different
  25. monopoly: a market in which there is only one seller for a product or service
  26. national debt: the sum of government deficits over time
  27. oligopoly: a form of competition in which just a few sellers dominate the market
  28. perfect competition: the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product
  29. producer price index [PPI]: an index that measures prices at the wholesale level
  30. recession: 2 or more consecutive quarters of decline in the GDP
  31. resource development: the study of how to increase resources and to create the conditions that will make better use of those resources
  32. socialism: an economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be evenly distributed among the people
  33. supply: the quantity of products that manufactors or owners are willing to sell at different prices at a specific time
  34. unemployment rate: the number of civilians at least 16 yrs who are unemployed and tried to find a job within the prior 4 weeks
  35. what are the 4 basic rights under free-market capitalism: 1. right to private property 2. right to own a business and to keep all profits 3. the right to freedom of competition 4. right to freedom of choice
  36. what are the four phases of long-term business cycles: 1. economic boom 2. recession 3. depression 4. recovery
  37. what are the three indicators of economic conditions: 1. gross domestic product [GDP] 2. unemployment rate 3. the price indexes