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Division of Labor
people doing what they do best and sticking to it
Laissez-faire
gov should not be involved with any form of market
The invisible hand
A system of profit for oneself. (Greed). Adam Smith claimed just enrich is good to society to serve common good
Capital
Money
Legal tender
To sell, one must accept as compensation
Revenue
Company making money
Profit
Money made by company after taxes
Expenses
Money company spends on products
Communism
Create a centralized you. Distribute goods/services equally
Labor theory of value
Value against the poor. Labor + price = how good a product is
Inflation
Causes money to lose value. Multiplies effect: raises income to levels higher than cost
Aggregate
Total amount of demand for goods/services
Multiplier effect
Y = C + I + G + X. Y = aggregate demand / GDP / total income. C = consumption
Individualism
Government minimization. Spending as much as one wants whenever one can afford only for relation with goal market. Against collectivism: group over individual preference
Price ceiling
Has effect when it's lower than market price. Shortage of supply
Price floor
Has effect when it's higher than market price. Surplus of supply
Demand curve
Ability to buy. Willingness to buy
Shifts in demand curve
Consumer preferences, population changes, costs of production, technological advances, government policies
Fiscal policy
Budget government distributes money for spending. Issues debt to fund deficits
Monetary policy
Federal reserve controls quantity of money in circulation. Influences long-term interest rates
Taxation
Federal tax revenue comes from income, corporate, and payroll taxes. Local taxes include property income and sales taxes
Tariffs
Tax on imports of foreign goods
Note 
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