Citizenship Test Vocab 05/01

Money Vs Currency

Money is a broader concept that includes anything that serves as a medium of exchange, store of value, or unit of account, while currency specifically refers to the physical forms of money, such as coins and banknotes, that are in circulation.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Consumer

A person who purchases goods and services for personal use, influencing demand in the economy.

Producer

An individual or entity that creates goods or services for sale, contributing to the supply side of the economy.

Market Economy

An economic system where decisions about production, investment, and distribution are based on supply and demand.

Command Economy

An economic system where the government makes all decisions regarding production and distribution of goods and services, controlling the economy.

Supply

The total amount of a good or service available for consumers to purchase at any given price.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices.

Federal Reserve

The central banking system of the United States, responsible for implementing monetary policy and regulating banks.

Oppurtunity Cost

The value of the next best alternative that is forgone when a choice is made.

How a tariff works

is by imposing a tax on imported goods, making them more expensive and protecting domestic industries.

Innovation in Government class

The process of creating and implementing new solutions or approaches in government that improve efficiency, effectiveness, and citizen engagement.

Excise Tax

A tax charged on specific goods or services, often included in the price, used to raise revenue for specific public expenditures.

Scarcity as it relates to the economy

Scarcity in the economy refers to the fundamental economic problem of having limited resources to meet unlimited wants and needs, leading to the necessity of making choices about resource allocation.

The basics of a paycheck

The essential components of a paycheck include gross pay, deductions (such as taxes and benefits), and net pay, which is the amount an employee takes home after all deductions.

Market Forces

the economic factors that influence the price and availability of goods and services, primarily supply and demand.

How supply and demand affect one another and what they are

Supply refers to the quantity of goods available, while demand denotes how much of those goods consumers want. The relationship between them determines prices and market equilibrium.