Massery Econ Test

this is just the glossary

Off-shoring

when an organization contracts some of its work out to another individual or company in another country

Oligopoly

A market structure dominated by a small number of sellers

Opportunity Cost

the best alternative given up when making a choice

Outsourcing

when an organization contracts some of its work out to another individual or company

PACED decision-making model

1. state the problem, 2. list the alternatives, 3. state the criteria, 4. evaluate the criteria, 5. make a decision

Partnership

a business organization that is owned by two or more people

Peak

a phase of the business cycle during which economic activity is at its highest

Perfect competition

an ideal market condition that includes a large number of sellers of identical goods and services in which no one seller controls supply or prices

Phishing

a scam that uses online technology to deceive an individual into disclosing personal information

Portability

the general characteristic of being readily transportable from one location to another

Preservation of standards/protectionism

the practice of developing domestic industries by protecting them from foreign competition

Progressive tax

a tax that takes a larger percentage of a higher income and a smaller percentage of a lower income

Proportional tax

a tax that takes the same percentage of all incomes

Quotas

limits on how much of a particular good can be brought into a country during a specific time period

Recession

a contraction of the business cycle during which economic activity slows for at least six months

regressive tax

a tax that takes a larger percentage of lower-income and a smaller percentage of higher-income

risk management

an organized strategy for controlling financial loss

Rule of 72

a technique for estimating the number of years required to double your money at a given rate of return (72 divided by interest rate equals number of years)

scarcity

the result of an inability to satisfy unlimited wants with limited resources

Seasonal unemployment

unemployment caused by seasonal changes in the weather or in the demand for certain products

Services

activities performed that satisfy people's wants or needs

Shortages

the result of quantities demanded exceeding the quantities supplied

simple interest

interest earned or paid on principal only (PxRxT)

sole proprietorship

a business owned by one person

specialization

occurs when an individual, business, or country produces a narrower range of goods and services than it consumes

store of value

a characteristic of a medium of exchange that allows worth to be retained

structural unemployment

unemployment caused by technological innovations and changes in consumer demands

subsidies

government payments to an individual or business to encourage or protect particular economic activities

supply

the quantities of a particular good or service a producer is willing and able to sell at different possible prices

supply curve

the graphic representation of supply

surpluses

the result of quantities supplied exceeding quantities demanded

tariffs

taxes on imports

time value of money

comparison of a lump sum of money, or series of equal payments between two different time periods, assuming a specified interest rate and time period

Tradeoffs

a choice that involves giving up some of one thing to have more of another

Traditional Economy

an economic system in which the basic economic questions are answered by tradition and custom

Trough

a phase of the business cycle during which economic activity is at its lowest

Underemployment

workers are overqualified for their jobs or work fewer hours than they prefer

Variable costs

costs that increase as the number of units produced increases

Voluntary exchange

the process of trading that occurs in markets

Traditional economy, command economy, market economy, mixed economy

4 major economic systems

command economy

An economic system in which the basic economic questions are generally answered by the government

marker economy

an economic system in which the basic economic questions are generally answered by consumers and producers

mixed economy

an economic system in which the basic economic questions are answered by a mixture of market, command, and traditional economies

embargos

Governmental bans on trade with one or more other nations

monopolistic competition

a market that has a large number of sellers who produce goods and services that are essentially alike, but not identical

cartel

an organization of sellers who wish to decrease or eliminate competition by limiting its output

capitalist economic system

a system where the means of production of goods or services are privately owned

Banking Act of 1933

also known as the Glass-Steagall Act; separated commercial banks from investment banks; established the Federal Deposit Insurance Corporation (FDIC)

Banking Act of 1935

made the FDIC permanent

FDIC

Federal Deposit Insurance Corporation; insures deposits up to $250k

Sarbanes-Oaxley Act of 2002

restricted accounting firm practices and required CEOs and CFOs to certify quarterly and annual reports

Dodd-Frank Wall Street Reform and Consumer Protection

2010; required significant changes affecting the oversight and supervision of financial companies

GATT

General Agreement on Tariffs and Trade

WTO

World Trade Orgnization

NAFTA

North American Free Trade Agreement

GNP

Gross National Product

IMF

International Monetary Fund; currently 188 countries are members

Smoot-Hawley Tariff Act

1930; one of the highest tariffs in US history to protect farmers from foreign competition, limited world trade right before the depression