Economics review for final

Scarcity

Demand surpasses availability of a good or service

Barter

Exchange without money for goods or services

Capital in economics

Assets like money, buildings, or machinery for wealth creation

Opportunity Cost

Loss incurred by not choosing a specific option

GDP

Measures the value of final goods and services in a country

GDP Per Capita

Economic output per person for accuracy

Traditional Economy

Rooted in culture, customs, and needs, not profit-driven

Command Economy

Government centrally determines production, prices, etc.

Capitalist Market Economy

Citizens and private entities drive the economy

Mixed Economy

Combination of market and command economy systems

Karl Marx - Communism

Advocated for communal ownership of wealth

Adam Smith - Free Market Capitalism

Market free from monopolies

John Maynard Keynes - Mixed Economy

Government intervention for stability

Invisible Hand

Unseen forces in a free market economy

Monopoly

Exclusive control over a commodity or service

Perfect Competition

Many buyers and sellers control prices

Monopolistic Competition

Many similar products but not exact substitutes

Law of Demand

Higher prices lead to lower demand

Equilibrium Price

Balanced economic forces state

Globalization

Increased interconnection due to trade and technology

Comparative Advantage

Efficient production compared to others

Absolute Advantage

Ability to produce more with the same inputs

Tariff

Tax on imported goods

NAFTA

North American Free Trade Agreement

Fiat Currency

Government-issued non-physical currency

Exchange Rate Appreciation

Increase in currency value

Fiscal Policy

Government control to reduce spending

Monetary Policy

Control inflation through interest rates

Consumer Price Index

Measure of inflation through average prices

Trade Union

Association protecting workers' rights

Business Cycle Diagram

Graph showing production fluctuations

Budget

Plan for monthly spending

Stock Index

Weighted stock market indicator

Regressive Tax

Flat tax affecting everyone equally

Excise Tax

Tax on specific goods like cigarettes

Scholarship

Awarded money for education

Credit Score Make-Up

Payment history's impact on credit score

Loan Term

Time to repay a loan

Stock

Ownership share in a company

Diversification

Spreading investments

Paycheck Deductions

Amounts deducted from pay

Dependents

Those relying on financial support

Insurance Deductible

Maximum payment for insurance claims

In Network

Covered healthcare providers

Collision Insurance

Covers property damage

Liability Insurance

Covers damage to others' property

Copay

Payment for prescriptions or clinic care

World Trade Organization

Reducing trade barriers

International Monetary Fund

Ensures stable economies

Tight Policy and Loose Policy

Government's money control strategies

Patent

Document protecting ideas or inventions

Externalities

Side effects of actions

Refundable Tax Credit

Excess tax money returned

Indirect Tax

Added to product value during production

Net Pay

Income after taxes and deductions

FAFSA

Federal student aid form

FICO

Credit score

Amortization Table

Loan payment schedule

Capital Gains Tax

Tax on asset earnings

W-4

Form for tax credits and deductions

W-2

Federal wage and tax statement

Down Payment

Initial payment on a purchase

Private Mortgage Insurance

Lender protection insurance

Debt to Income Ratio

Comparison of income to debt

Disposable Income

Total income after taxes

Social Security Number

Identifies for social security benefits

Payroll Tax

Taxes on salaries

Financial Award Letter

Shows student financial aid

Fixed Interest Rate

Loan with unchanging interest rate

Variable Interest Rate

Interest rate changing over time

Supply Chain

Production process sequence

Regulatory Agencies

Government bodies setting standards

Compound Interest

Interest on a principal sum

401K

Employer-sponsored pension account

Safe Investments (Bonds, Savings Account)

Low-risk investments

Scam

Deceptive practices like bait and switch