Globalization
Buying products made in another country is known as this.
Imports
This measures the total dollar value of all final goods and services produced within a country's borders in one year.
GDP
When inflation rises, this decreases because each dollar buys fewer goods and services.
Purchasing Power or Dollar Value
The labor force
This economic system is based on private ownership and profit motive.
Capitalism
An American shoe company designs its products in California, manufactures them in Vietnam, and sells them in stores across Europe and North America. What is this called?
Globalization
These goods are counted in GDP because they are sold to consumers rather than used to produce another product.
Final Goods
This index measures the price changes consumers pay for everyday goods in a “market basket.”
Consumer Price Index (CPI)
A recent college graduate searching for their first job is an example of this type of unemployment.
Frictional Unemployment
This famous economist wrote The Wealth of Nations and is associated with capitalism.
Adam Smith
A country imports cheaper electronics from overseas instead of producing them domestically because other countries can produce them more efficiently.
This economic concept explains why countries specialize and trade.
Comparative Advantage
GDP calculated using current 2026 prices, without adjusting for inflation.
Nominal GDP
This extreme form of inflation occurs when prices increase rapidly in a short period of time, such as Germany after World War I.
Hyperinflation
When technology replaces workers or their skills no longer match available jobs, it creates this type of unemployment.
Structural Employment
This political philosopher wrote The Communist Manifesto.
Karl Marx
A U.S. company moves its manufacturing operations to Vietnam because labor costs are significantly cheaper there. The finished products are then shipped back to the United States and sold to American consumers.
This business practice of moving production to another country to lower costs is known as:
Outsourcing
A country’s GDP is rising, unemployment is falling, but inflation is increasing rapidly. Economists might worry that the economy is approaching this stage of the business cycle.
Peak
A grocery store owner notices that the cost of wheat, sugar, and transportation has increased. A few months later, the prices of bread and pastries at the store also increase for customers.
This economic indicator likely increased first and signaled future inflation.
Producer Price Index (PPI)
Workers losing jobs because of an economic downturn during a recession are experiencing this type of unemployment.
Cyclical Unemployment
The United States is classified as this type of economic system because it combines elements of capitalism and government intervention.
Mixed Market Economy
A car company produces engines in Germany, electronics in Japan, and assembles the final vehicle in Mexico before selling it worldwide. Each country specializes in the stage of production it performs most efficiently.
This global production strategy is an example of:
Specialization
Cooking dinner for your family, mowing your own lawn, and illegal drug sales are NOT counted in GDP because they fall under these two categories.
Nonmarket Activities and the Underground Economy (Black Market)
In 2025, the average price of groceries, rent, and transportation increases across the country. Economists compare the cost of a standardized list of goods from 2024 to 2025 to determine how much prices have changed. What is this list of good called?
Market Basket
A college student is not working but is also not searching for a job because they are focused on school. Because they are not actively looking for work, economists do not count them as unemployed. Why not?
Mr. Holland or Mr. Haraway or Mr. Bryan will judge this
In this economic system, the government owns the factories, farms, and businesses that produce goods, and private individuals cannot own property or operate companies for profit. Who owns the property in this system?
The public