Marketing Unit 2 - Economics

scarcity

the economic principle that we have unlimited wants and needs but limited resources

economy

the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services

free enterprise

freedom of general economic activity within a nation

factors of production

the economic resources used to produce goods and services for consumption

traditional economy

a system where goods production and distribution are driven by time-honored beliefs, customs, culture, and traditions

mixed economy

an economy with characteristics of both a market and command economy

market economy

an economy where prices are determined by competition with no government intervention

command economy

an economy in which production, investment, prices, and incomes are determined by the government

socialism

populist economic and political system based on collective, common, or public ownership of the means of production

capitalism

an economic and political system in which a country's trade and industry are controlled by private owners for profit

communism

an extreme political and economic ideology with no classes of people, means of production are owned communally, and private property is nonexistent

supply

the quantity of a product that producers are willing and able to produce at a certain price

demand

the quantity of a product that consumers are willing and able to buy at a certain price

equilibrium

the point in which supply and demand are equal

theory of supply and demand

the theory that prices are determined by the relationship between supply and demand

GNP - gross national product

Income earned by residents from overseas investments, minus income earned by foreign residents.

GDP - gross domestic product

The value of all the goods and services produced by a country in a year.

PPI - producer price index

Measures the average change over time in selling prices received by domestic producers of goods and services

CPI - consumer price index

A measure of the average change in prices of a “basket” of goods and services over time

business cycle

the natural expansion and contraction of economic growth that happens in an economy over a period of time

expansion

an increase in the level of economic activity, and of the goods and services available. It is a period of economic growth as measured by a rise in real GDP.

peak

the time in which a variety of economic indicators reach their highest level, followed by a significant decline in economic activity

contraction

a period when economic output declines. During this phase, the economy is producing fewer goods and services than it did before.

trough

the stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion