DECA Chapter 3 Vocab Flashcards

economy

The organized way a nation provides for the needs and wants of its people through the production, distribution, and consumption of goods and services.

Resources

All the things used to create in producing goods and services.

Factors of Production

Are comprised of land, labor, capital, and entrepreneurship, which are the essential inputs needed for creating goods and services.

Infrastructure

which is the physical development of a country. This includes roads, ports, sanitation facilities, and utilities, and especially telecommunications.

Entrepreneurship

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

Scarcity

The difference between wants and needs and available resources.

Traditional Economy

Habits, traditions, and rituals, 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 business compete for consumers.

Command Economy

Is a system in which a country’s government makes all economic decisions regarding what, how, and for whom goods and services will be produced and distributed.

Productivity

IS the output per work 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 property located within a country.

Gross National Product (GNP)

the total dollar value of goods and services produced by a nation, including goods and services produced abroad by U.S. citizen and companies.

Inflation

Refers to rising prices

Consumer Price index (CPI)

Measures the change in price over a period of time of 400 specific retail goods and services used by the average urban household.

Producer Price index (PPI)

measures wholesale price levels in the economy.

Business Cycle

Key Phases: expansion, recession, trough, and recovery. After recovery, expansion begins again.

Expansion

Time when the economy is flourishing. It is sometimes referred to as a period of prosperity.

Recession

A period of economic slowdown that lasts for at least two quarters of a year, or six months.

Depression

A period of prolonged recession. During a depression, it becomes nearly impossible to find a job, and many businesses are forced to shut down.

Recovery

The term that signifies a period of renewed economic growth following a recession or depression.