DECA chapter 3 vocab

Economy

the organized way a nation provides for the needs and wants of its people, involving the production, distribution, and consumption of goods and services.

Resources

all the things used in producing goods and services.

Factors of Production

compromised of land, labor, capital, and entrepreneurship.

Infrastructure

the physical development of a country.

Entrepreneurship

the process of identifying a market opportunity, organizing resources, and building a new business or venture to generate economic or social value while assuming financial risk.

Scarcity

the fundamental economic problem of having limited resources to satisfy unlimited human wants and needs.

Traditional Economy

an economic system where production, distribution, and trade decisions are guided by customs, history, and long-standing beliefs rather than market forces or government planning.

Market Economy

is an economic system where decisions about production, investment, and distribution are guided by the forces of supply and demand rather than a central government.

Command Economy

an economic system where a central government authority controls the production, pricing, and distribution of goods and services instead of relying on market forces like supply and demand.

Productivity

the measure of efficiency that compares the amount of goods or services produced (output) to the amount of resources used (input).

GDP

the total monetary or market value of all final goods and services produced within a country's borders during a specific time period

GNP

is the total market value of all goods and services produced by the labor and property supplied by a country's residents and businesses, no matter where that production takes place.

Inflation

the general, continuous increase in the prices of goods and services across an economy over time, which reduces the purchasing power of money.

CPI

measures the average monthly change in prices paid by urban consumers for a representative basket of goods and services.

PPI

measures the average change over time in selling prices received by domestic producers for their goods and services.

Business Cycle

the natural, recurring ups and downs in a nation's aggregate economic activity over time.

Expansion

the act or process of growing, increasing, or becoming larger in size, volume, quantity, scope, or importance.

Recession

a significant, broad-based decline in economic activity that lasts more than a few months.

Depression

an extreme, long-term downturn in economic activity marked by a severe drop in production, mass unemployment, falling prices, and widespread financial distress.

Recovery

the business cycle phase that follows a recession or economic trough, marked by a sustained improvement in business activity, rising GDP, increasing employment, and growing consumer and investor confidence.