American Government Economics Review Terms

Flashcards for American Government Economics Review Terms

Economics

Study of how people and countries use resources to produce different types of goods and services

Macroeconomics

The study of an entire economy which focuses on broad trends and policies. It's how the government controls money and jobs

The Black Market

The illegal selling and buying of goods

Market System

An economy that decides what to buy and what to sell based on supply and demand

Traditional System

An economy based on culture and traditions

Command System

An economy which is fully run by the government. They choose what to produce and how to distribute the goods

Mixed System

An economy that combines market and command systems. Both the government and people get to make decisions

Inflation

When the prices of goods and services goes up

GDP

The total value of all finished goods and services produced in a country during a certain time period, usually around a year

CPI

The change in prices of things people buy. It shows how much prices have gone up or down over time

Unemployment Rate

The percentage of people who are looking for a job but can’t find one

Consumers

People who buy goods and services

Producers

The people or companies that make the goods or provide services

Supply and Demand

Supply is how much of something is available and demand is how much people want it

Needs

Things you must have to live

Wants

Things you wish to have but don’t need in order to live

Goods

Things you can touch or buy

Services

Work that is being done for other people

Opportunity Cost

What you give up when choosing something else

Trade Off

Choosing one thing over another

Scarcity

When there is not enough of something. Something that is very rare

Entrepreneur

Someone who starts a new business in order to make money

The Fed

The central bank of the USA which controls the money supply and interest rates

Discount Rate

The interest rate the FED charges banks to borrow money

Deficit

When the government spends more money than they make in a year

Debt

The total amount of money the government owes from past deficits

Progressive Taxes

Taxes that take a higher percentage from rich people than poor people

Proportional/Flat Taxes

Taxes where everyone has to pay the same percentage no matter how much they earn

Regressive Taxes

Taxes that take a higher percentage from poor people than rich people

Sales Tax

A tax added to the price of goods and services when you buy them

Property Tax

Tax on things you own such as your house

Excise Tax

A special tax on certain goods such gasoline and cigarettes

Estate Tax

Tax on money or property that is given from someone who died

Recession

When a country's economy slows down for a while. Businesses make less money, people lose jobs and spending goes down

Minimum Wage

The lowest legal amount a person must make per hour

Second hand sales

Selling used items

Land

Soil, water and minerals

Labor

Human work which is used to make goods and services

Capitol

tools, machines and buildings used to make goods