32 terms

Unit 1 Economy Terms

STUDY
PLAY
Market Economy
Buyers and sellers answer the three economic questions of what, how, and for whom to produce.
Traditional Economy
System in which economic decisions are based on customs and beliefs.
Embargo
A type of trade barrier that forbids trade with another country.
Currency Exchange
A method by which money from one country is converted into the currency of another country to pay for goods and services in that country.
Human Capital
The people who perform labor and the education and training needed to make them more productive.
Natural Resources
Materials or substances that occur in nature and can be used for economic gain.
Quota
A type of trade barrier that places a limit on the amount of a good that can be imported into a country.
Standard of living
A level of material comfort as measured by the goods, services, and luxuries available to an individual, group, or nation.
Mixed Economy
When the economy shows characteristics of both command and market.
Command Economy
The government makes all of the economic decisions and answers the economic questions of what, how, and for whom to produce.
Specialization
When one country can produce a good or service at a lower opportunity cost than another country.
Literacy Rate
The number of people in an area that can read and write.
Entrepreneurship
When individuals or groups have an idea for a good or service and take the risk to produce it.
Physical Capital
The factories, machinery, and technology used to produce goods and services.
Tariff
A type of trade barrier that places a tax on imported goods.
Economic Continuum
An instrument for showing how economic systems relate to each other on a scale of more government control vs. less government control.
Consume
To use or use up something
Barter
The exchange of goods or services for other goods or services without using money
Trade
The action of buying and selling goods and services.
Famine
Extreme scarcity of food
Infrastructure
The basic physical and organizational structures and facilities (e.g., buildings, roads, and power supplies) needed for the operation of a society (country, city, etc.) or enterprise.
Goods
Merchandize; articles that can be traded
Services
Supply aids or services rather than products or goods
Invest
To put money into something on hopes of earning a profit in return
Subsistence
Having only enough to survive; having no extra left over
Diversified economy
Does not depend on one type of good or service; produces multiple types of goods and services
Allocation
The process of distributing something
Scarce
insufficient for the demand (especially of food, money, or some other resource)
Production
The action or process of making or manufacturing from components or raw materials
Sanction
A penalty for disobeying a law or a rule
Gross Domestic Product (GDP)
The total value of all goods and services produced within a country in a year
Per Capita GDP
Gross Domestic Product (GDP) divided by the number of people in the country