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25 terms

Global Economics Ch4

STUDY
PLAY
economy
the way a nation makes economic choices
resources
all things used in producing goods and services
factors of production
resources
land
everything on the earth that is in its natural state
labor
all the people who work in the economy
capital
money needed to start and operate a business
entrepreneurship
the skills of people who are willing to risk their time and money to run a business
infrastructure
the physical development of a country
scarcity
the difference between wants and needs and available resources
market economy
there is no government involvement in economic decisions
command economy
the government controls the factors of producton and makes all the decisions about their use
capitalism
an economic system characterized by private ownership of business
socialist
increased government involvement in people's lives and the economy
communist
the government runs everything, totalitarian
privatization
the process of selling government-owned businesses to private individuals
productivity
output per worker hour that is measured over a defined period of time, such as week, month, or year
Gross Domestic Product (GDP)
measure of the goods and services produced using labor and property located in this country
inflation
rising prices
Consumer Price Index (CPI)
measures the change in price over a time of some 400 specific retail goods and services used by the average urban household
Producer Price Index (PPI)
measures wholesale price levels in the economy
business cycle
recurring changes in the economy
prosperity
expansion, the time when the economy is flourishing
recession
period of economic slowdown that lasts for two quarters, or six months
depression
prolonged depression; it becomes nearly impossible to find a job and many business are forced to shut down
recovery
increase in the overall economic activity