Core Economic Concepts
This is the idea that there are not enough resources to satisfy all humanity's wants.
What is Scarcity?
A period when the economy slows down significantly, with less production and more job losses.
Recession
Any money a business spends
Expense
Expenses that do not change, no matter how much a business produces or sells (e.g., rent).
Fixed Costs
This is money paid out regularly by a company from its profits to its shareholders.
What are Dividends?
This concept describes how the amount of a product available and how much customers want it work together to set prices.
What is Supply and Demand?
How a government uses its spending and taxes to influence the economy.
Fiscal Policy
Money or debts that a business owes to others.
Liabilities
This measure is used to evaluate how efficient or profitable an investment has been
Return on Investment (ROI)?
This is money that a business has borrowed and must pay back, usually with interest.
Debt
When a company produces more goods, the cost of making each item becomes lower, which is known as this.
What are Economies of Scale?
How a central bank controls the money supply and interest rates to influence the economy.
Monetary Policy
Money that the business owes to its suppliers or others for goods or services it has received.
Accounts Payable
Money that customers owe to the business for goods or services already provided is called this.
Accounts Receivable?
This is the amount of money invested in the company by its owners or shareholders.
Equity
these are two of the components of GDP
GDP = consumer spending + government spending + investments + net exports
This is widely considered the measure for quality of life
What is Debt-to-GDP Ratio
the process of predicting future financial outcomes, like sales, expenses, or overall economic conditions (contributing to or understanding how future expenses and revenues are estimated for planning purposes).
Forecasting
When a business has more expenses than income; a shortage of money
(Budget) Deficit
This is a type of loan where an investor lends money to a company or government for a set time, and the borrower pays interest.
Bond
A measure of how much buyers and sellers change their behavior (like buying more or less) when prices or other factors change.
Elasticity
What are the three main goals of all the world's economies?
Growth
High employment (“full employment”)
Price stability (control of inflation)
Spreading the cost of an intangible asset (like a patent or software) over its useful life.
Amortization
True or false: All companies and governments are required to release a budget or financial plan/statement?
False, only public companies and government are required to do this.
How easily an asset (like property or stocks) can be turned into cash without losing much value.
Liquidity