Ch2 Intro to Business

GDP (Gross Domestic Product)

The total dollar value of all final goods and services produced in a country during one year

GDP per capita

The GDP output per person

Unemployment rate

The portion of people in the labor force who are not working. These are people who are willing to and are looking for a job but cannot find one

Productivity

The production output in relation to a unit of input, such as a worker

Personal income

Refers to salaries and wages as well as investment income and government payments to individuals

Retail Sales

The sales of durable goods bought by consumers

Business Cycle

The movement of the economy through recurring ups and downs of GDP

Prosperity

A period in which most people who want to work are working, wages are good and there is GDP growth

Recession

A period in which demand begins to decrease, businesses lower production, unemployment begins to rise and GDP growth slows for two or more quarters

Depression

A phase marked by a prolonged period of high unemployment, weak consumer sales, and business failure

Recovery

The phase in which unemployment begins to decrease, demand for goods and services increases and GDP begins to rise again

Inflation

An increase in the general level of prices

Price Index

A number that compares prices in one year with some earlier base year

Deflation

A decrease in the general level of prices

Capital Project

Spending by businesses for items such as land, buildings, equipment, and new products.

Stock

Represents ownership in a corporation

Bond

Represents debt for an organization

Budget Surplus

Spending less than is taken in

Budget Deficit

Spending more than you take in

National Debt

The total amount owed by the federal government over the course of many years