State of the Economy

These flashcards cover key vocabulary related to the economy, its growth, the business cycle, and various economic terms.

Economy

The way a nation makes economic choices about how it uses its limited resources.

Factors of Production

Scarce resources that include natural, human, capital resources, and entrepreneurship.

Economic Growth

An increase in the wealth of the country and its population that aims to increase living standards.

GDP

Gross Domestic Product; the total monetary value of all final goods and services produced in a country.

C (Consumer Spending)

The total amount of money spent by households on goods and services.

I (Business Investment)

The expenditure by businesses on capital goods that will be used for future production.

G (Government Spending)

Total government expenditure on goods and services in the economy.

(X-M) (Net Exports)

The value of a country's total exports minus the value of its total imports.

Productivity Levels

Measures of efficiency in production, often increased through technology and innovation.

Business Environment

The external factors that influence business operations, including regulations and market conditions.

Tax System

The method by which a government collects revenue from businesses and individuals.

Economic Stability

A condition where an economy experiences constant growth without excessive inflation or deflation.

International Trade

The exchange of goods and services between countries.

Business Cycle

Fluctuations in economic activity that an economy experiences over time.

Peak

The stage of the business cycle where economic activity is at its highest.

Recession

A period of declining economic activity characterized by a drop in GDP.

Trough

The lowest point in the business cycle, marking the end of declining activity.

Stagflation

An economic condition of high inflation combined with high unemployment and stagnant demand.

Hyperinflation

An extremely rapid or out of control rise in prices, resulting in a significant decrease in currency value.

Expansion

A phase in the business cycle when economic activity is increasing.

Contraction

A period of economic decline marked by falling output and employment.

Inflation

A general increase in prices and fall in the purchasing value of money.

Consumer Confidence

The degree of optimism that consumers feel about the overall state of the economy.

Business Investment Growth

An increase in spending by businesses on capital assets over time.

Real GDP

The inflation-adjusted value of all final goods and services produced, measured in terms of constant prices.

Access to Credit

The ability of individuals and businesses to borrow money from financial institutions.

R&D (Research and Development)

Investment in innovative processes to improve products and services.