Economics final review vocab

collateral

something of value that a lender can claim if a loan is not repaid

corporation

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities

creditors

persons or institutions to whom money is owed

interest

payment made for the use of borrowed money

partnership

unincorporated business owed and operated by two or more people

premium

monthly, quarterly, semiannual, or annual price paid for an insurance policy

secured loan

money borrowed that is backed up with something of value in case the borrower can’t pay it back

sole proprietorship

unincorporated business owned and run by a single person

stockholder

person who owns a share or shares of stock in a corporation

insecured loan

money borrowed that is guaranteed only by a promise to repay it

factor market

where all the factors of production are bought and sold

standard of living

quality of life

economic interdependence

reliance on others to produce goods and services we need

specialization

each worker learns one task very well

consumerism

movement that promoted the rights of buyers

production possibilities curve

represents that range of production possibilities

capital good

manufactured good used to produce other goods and services

gross domestic product

measures a country’s output and economic health

nondurable goods

food is an example of one

scarcity

a fundamental problem in every society

modified free enterprise economy

market economy in which free carry on economic affairs, but some government regulation

profit motive

driving force that encourages people to improve their material well being

voluntary exchange

economic action done or brought about by free choice

entrepreneur

someone who organizes and manages land, capital, and labor to make a profit

competition

struggle among sellers to attract customers

customer sovereignty

the role of the consumer as ruler of the market

social security

federal program retirement benefit that covers most working people

inflation

rise in the general level of prices

minimum wage

lowest legal wage that can be paid to most workers

mixed economy

economic system with a combination of command, traditional, and market economies