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Ebook3w

"barriers to entry: Factors, such as technological or legal conditions, that prevent new firms from competing equally with an existing firm. business: An organization that strives for a profit by providing goods and services desired by its customers. business cycles: Upward and downward changes in the level of economic activity. capital: The inputs, such as tools, machinery, equipment, and buildings, used to produce goods and services and get them to the customer. capitalism: An economic system based on competition in the marketplace and private ownership of the factors of production (resources); also known as the private enterprise system. circular flow: The movement of inputs and outputs among households, businesses, and governments; a way of showing how the sectors of the economy interact. communism: An economic system characterized by government ownership of virtually all resources, government control of all markets, and economic decision-making by central government planning. consumer price index (CPI): An index of the prices of a “market basket” of goods and services purchased by typical urban consumers. contractionary policy: The use of monetary policy by the Fed to tighten the money supply by selling government securities or raising interest rates. cost-push inflation: Inflation that occurs when increases in production costs push up the prices of final goods and services. costs: Expenses incurred from creating and selling goods and services. crowding out: The situation that occurs when government spending replaces spending by the private sector. cyclical unemployment: Unemployment that occurs when a downturn in the business cycle reduces the demand for labor throughout the economy. demand: The quantity of a good or service that people are willing to buy at various prices. demand curve: A graph showing the quantity of a good or service that people are willing to buy at various prices. demand-pull inflation: Inflation that occurs when the demand for goods and services is greater than the supply. demography: The study of people’s vital statistics, such as their age, gender, race and ethnicity, and location. economic growth: An increase in a nation’s output of goods and services. economic system: The combination of policies, laws, and choices made by a nation’s government to establish the systems that determine what goods and services are produced and how they are allocated. economics: The study of how a society uses scarce resources to produce and distribute goods and services. entrepreneurs: People who combine the inputs of natural resources, labor, and capital to produce goods or services with the intention of making a profit or accomplishing a not-for-profit goal. equilibrium: The point at which quantity demanded equals quantity supplied. expansionary policy: The use of monetary policy by the Fed to increase, or loosen, the growth of the money supply. factors of production: The resources used to create goods and services. federal budget deficit: The condition that occurs when the federal government spends more for programs than it collects in taxes. Federal Reserve System (the Fed): The central banking system of the United States. fiscal policy: The government’s use of taxation and spending to affect the economy. frictional unemployment: Short-term unemployment that is not related to the business cycle."