Fundamentals of Economics
The basic economic problem of fulfilling unlimited wants with limited resources.
scarcity
The portion of the economy where goods and services are sold to consumers.
product market
The general expectation that higher prices will lead to higher wages, and that higher wages will lead to higher prices.
built-in inflation
The process through which the world's cultures, governments, and economies become more connected through the spread of people, ideas, and goods.
globalization
Highest valued forgone alternative.
Opportunity cost
What happens in the market for ice cream if the price of milk falls?
Supply increases
Structural Unemployment
Countries benefit from trade by specializing according to their
The way in which a society allocates resources, organizes production, and distributes goods and services.
economic system
As the price of a good decreases, the quantity demanded increases.
law of demand
A temporary period of economic decline reflected by a fall in gross domestic product (GDP) and a rise in the unemployment rate for two quarters in a row.
recession
An increase in the value of a currency relative to another.
appreciation
The equipment, tools, machinery, and so forth that are used in the production of a good or service.
capital
A market structure in which a small number of producers control the supply of a good or service.
oligopoly
The government's policies related to spending and taxation to influence the economy.
fiscal policy
The level of wealth, comfort, and goods and services available to someone at a given income level within a society.
standard of living
Graph illustrating concepts of scarcity, opportunity cost, and efficiency.
What happens in the market for gas if everyone expects price to increase in the future?
Demand increases, Supply decreases, Price rises
What is the formula for calculating GDP using the expenditure approach? (also known as the national income accounting equation)
C + I + G + (X-M)
A country with lower levels of GDP, technology, and standards of living.
developing nation