Basic Econ Terms
Turning non-cash assets and investments into cash.
What is Liquidating?
A field of study that examines the behavior of the economy, including markets, business, consumers, and governments. It also examines economy-wide inflation, the rate of economic growth national income, gross domestic product (GDP), and changes in unemployment.
What is Macroeconomics?
Comprised of all the buyers and sellers of a particular good or service (ex. New York Stock Exchange).
What is a Market?
The extra pay a specific group earns above a baseline, often reflecting higher skills, less desirable hours, or Union membership. The “bonus” for being in a higher pay category.
What is a Wage Premium?
Something that passively puts money into your pocket.
What is an Asset?
The BEST alternative one gives up when making a decision. The value a business or company looses when choosing one option over anther.
What is Opportunity Cost?
Gross-domestic-product. The resource guide defines this as, “the market value of all final goods and services produced within a country during a specified period of time.” Essentially, the value of all final goods and services produced is added together to find the total output of an economy.
What is GDP?
A field of study that focuses on what incentivizes the decisions people and companies make, and how resources are used and distributed. It provides a more detailed understanding of individuals, firms, and markets.
What is Microeconomics?
During the interwar period (including the 1920’s) backlash against globalization was widespread in the US, which reflected on American trade policy at the time. In 1922, new taxes were imposed on imported and exported goods. What are these taxes?
What are Tariffs?
An economic cycle in which an asset is severely over-valued, bringing an excessive number of investors, and then crashes as fast or faster than the asset grew.
What is a Bubble?
One that buys goods and services for the purpose of consumption.
What is a Consumer?
A sum, or a whole, representing a composite value of multiple parts (ex. Combining all household spending into one total).
What is an Aggregate?
Goods that have a positive relationship between demand and consumer income.
What are Normal Goods?
Popular from the 1830s to the 1930s, these associations operated on a mutual basis, where members held shares and often took turns receiving mortgage financing.
What are Building and Loan Association?
The most famous example of a type of imperfect competition. Formed when a company or group having complete control over the supply or trade of a good or service.
What is a Monopoly?
Measures how sensitive, or responsive one economic variable (like demand or supply) is to changes in another economic variable (such as price or income).
What is Elasticity?
In short, the percentage of the labor force that is currently unemployed.
What is the definition of Unemployment Rate?
Goods that have a negative relationship between demand and consumer income.
What are Inferior Goods?
A new type of investment in the 1920s. An investment vehicle that pools money from multiple investors to purchase a diversified portfolio of securities. These securities may be stocks, bonds, or money market instruments, they are managed by professionals.
What is a Mutual Fund?
Something that removes money from your pocket.
What is a Liability?
One that produces goods and services to satisfy consumer demand.
What is a Producer?
The amount of something for each person in a group.
What does Per Capita Measure?
The mechanism that produces the coordination in our economy. The actions of buyers and sellers that determine the price at which each product or service sells and the quantity that changes hands.
What is Supply and Demand?
Tool used by major companies (famously Ford) to help people pay for things when they don’t have the money, before credit cards existed!
What is Installment Financing?
The most popular type of economics, primarily founded by John Maynard Keynes.
What is Keynesian Economics?