DECA Unit 3

Economy

The organized way a nation provides for the needs and wants of its people.

Resources

All things that are used in producing goods and services

Factors of production

They are compromised of land, labor, capital, and entrepreneurship.

Infrastructure

The physical development of a country. Includes roads, ports, sanitation facilities, and utilities, especially telecommunications

Entrepreneurship

Refers to the skills of people who are willing to invest their time and money to run a business.

Scarcity

The difference between wants and needs and available resources. Scarcity forces nations to make economic choices

Traditional Economy

Habits, traditions, and rituals that answer the basic questions of what, how, and for whom.

Market Economy

There is no government involvement in economic decisions. Individuals and companies own the means of production and businesses compete for consumers.

Command Economy

A system in which a country’s government makes all economic decisions regarding what, how, and whom goods and services are produced for

Productivity

Is output per worker hour that is measured over a defined period of time, such as a week, month, or year.

Gross domestic product (GDP)

The output of goods and services produced by labor and opportunity located within a country

Gross national product (GNP)

The total dollar value of goods and services produced by a nation

Inflation

Refers to rising prices. A low inflation is good because it shows a stable economy

Consumer price index (CPI)

Measures the change in price over a period of time of 400 specific retail goods and services

Producer price index (PPI)

Measures wholesale price levels in the economy.

Business cycle

A cycle that goes through expansion, recession, trough, and recovery. The natural rise and fall of the economy

Expansion

A time when the economy is flourishing. It is when the economy is doing well.

Recession

A time of economic slowdown that lasts for at least 6 months.

Depression

A prolonged recession

Recovery

The period of time that an economy is getting better following a recession or depression.