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quantity of an item


wanting or needing of an item


function of supply and demand

law of scarcity

if an item is scarce, it has a larger price

everyone has a right to ...

profit, loss, possibility to succeed or fail


when jobs go overseas for cheaper labor rates and less regulations

causes of inflation

cost(push), demand(pull), monetary inflation

money supply

the amount of money in circulation throughout the economy at any given time


medium of exchange


precious metals, usually gold and silver for currency


the ability to change specie into paper notes and back again


used as money, made of paper derivative

intrinsic value

percentage of the total money supply that a good or service is worth

national debt

what the country owes it bond holders


an IOU for money over a specific length of time with the promise to pay interest and principal when the time expires

Progressive Graduated Income Tax(PGIT)

the more you make, the more the government takes

flat tax

everyone pays the same taxation rate

how to get rid of a deficit

cut spending, raise revenue, borrow-bond

ways out of a debt trap

pay in full, pay a % of the debt, repudiate=don't pay debt, monetize=change money=hyperinflation


13% inflation or more

business cycle

a cycle that lasts 7-10 years. It cycles through recovery, prosperity, recession, and depression and then repeats


6 months of negative economic growth


gross domestic product

3 types of business ownership models

sole proprietorship, partnership, corporation

sole proprietorship

one person owns the business


two or more persons own the business with equal or non-equal ownership


owned by stockholders and administered by a board of directors

pros of sole proprietorship

easy to raise capital, ease of liquidation of assets; dealing with no other people other than clients

pros of partnership

easy to raise capital with partners' permission; can multiply the ability to raise capital by the number of partners in the partnership

pros of corporation

cumbersome to raise capital, but the amount can be huge compared to sole proprietorship or partnership; treated as a person under the law; can be advantageous due to taxes; limited liability

push inflation (cost)

when an ingredient or item during the manufacturing process goes up in cost

pull inflation (demand)

when demand outstrips supply tremendously

cons of a sole proprietorship

cannot raise adequate capital; total liability

cons of a partnership

dealing with partners; total liability

cons of a corporation

owners are the shareholders; treated as person under the law

16th Amendment

allows government to tax

total liability

if your business goes out of business, your items/property are at risk

Chief Justice Marshall said..

"the power to tax is the power to destroy"

monetary inflation

increase in money supply which cause price inflation. ms1=100 2%=2; ms2=200 2%=4; ms3=50 2%=1

a surplus causes

rainy day fund; tax cut

rainy day fund

used to stop a deficit

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