WGU C201 Chapter 3 Economic Challenges Facing Business Today | 40 Expert curated questions and answers already graded A+ | GUARANTEED SUCCESS

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40 Terms

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balanced budget

Situation in which total revenues raised by taxes equal the total proposed spending for the year.

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budget

Organization's plan for how it will raise and spend money during a given period of time

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budget deficit

Situation in which the government spends more than the amount of money it raises through taxes.

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budget surplus

Excess funding that occurs when government spends less than the amount of funds raised through taxes and fees.

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Communism

Economic system in which all property would be shared equally by the people of a community under the direction of a strong central government.

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Consumer Price Index (CPI)

Measurement of the monthly average change in prices of goods and services.

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core inflation rate

inflation rate of an economy after energy and food prices are removed

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cyclical unemployment

People who are out of work because of a cyclical contraction in the economy.

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Deflation

Opposite of inflation, occurs when prices continue to fall.

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demand

Willingness and ability of buyers to purchase goods and services.

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demand curve

Graph of the amount of a product that buyers will purchase at different prices.

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Economics

Social science that analyzes the choices people and governments make in allocating scarce resources.

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equilibrium price

Prevailing market price at which you can buy an item.

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expansionary monetary policy

Government actions to increase the money supply in an effort to cut the cost of borrowing, which encourages business decision makers to make new investments, in turn stimulating employment and economic growth.

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fiscal policy

Government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general welfare of citizens, and encourage economic growth.

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frictional unemployment

Applies to members of the workforce who are temporarily not working but are looking for jobs.

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Gross Domestic Product (GDP)

Sum of all goods and services produced within a country's boundaries during a specific time period, such as a year.

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Hyperinflation

Economic situation characterized by soaring prices.

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Inflation

Economic situation characterized by rising prices caused by a combination of excess consumer demand and increases in the costs of raw materials, component parts, human resources, and other factors of production.

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Macroeconomics

Study of a nation's overall economic issues, such as how an economy maintains and allocates resources and how a government's policies affect the standards of living of its citizens.

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Microeconomics

Study of small economic units, such as individual consumers, families, and businesses.

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mixed market economies

economic system that draws from both types of economies, to different degrees

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monetary policy

Government actions to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans.

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monopolistic competition

Market structure in which large numbers of buyers and sellers exchange heterogeneous products so each participant has some control over price.

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Monopoly

Market situation in which a single seller dominates trade in a good or service for which buyers can find no close substitutes.

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national debt

Money owed by government to individuals, businesses, and government agencies who purchase Treasury bills, Treasury notes, and Treasury bonds sold to cover expenditures.

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Oligopoly

Market structure in which relatively few sellers compete and high start-up costs form barriers to keep out new competitors.

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Planned economy

Economic system in which government controls determine business ownership, profits, and resource allocation to accomplish government goals rather than those set by individual firms

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Privatization

Conversion of government-owned and operated companies into privately held businesses.

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Productivity

Relationship between the number of units produced and the number of human and other production inputs necessary to produce them.

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pure competition

Market structure, in which large numbers of buyers and sellers exchange homogeneous products and no single participant has a significant influence on price.

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Recession

Cyclical economic contraction that lasts for six months or longer.

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Regulated monopolies

Market situations in which local, state, or federal government grants exclusive rights in a certain market to a single firm.

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restrictive monetary policy

Government actions to reduce the money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth.

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seasonal unemployment

Joblessness of workers in a seasonal industry.

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Socialism

Economic system characterized by government ownership and operation of major industries such as communications.

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structural unemployment

People who remain unemployed for long periods of time, often with little hope of finding new jobs like their old ones.

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supply

Willingness and ability of sellers to provide goods and services

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supply curve

Graph that shows the relationship between different prices and the quantities that sellers will offer for sale, regardless of demand.

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unemployment rate

Percentage of the total workforce actively seeking work but currently unemployed.