VOCABULARY
Scarcity?
Fundamental economic problem of meeting people's virtually unlimited wants with scarce resources.
3 Main Economic System
-traditional
-command
-market economies
Microeconomics?
Apart of economics that studies small units, such as individuals and firms.
Subsidies?
Government payment to encourage or protect a certain economic activity.
Why Nations Trade?
Some trade takes place because countries lack goods at home.
Law of Demand?
Rule stating that consumers will buy more of a product at lower prices and less at higher prices.
Payroll withholding System
System that automatically deducts income taxes from paychecks on a regular basis.
Market Economy
Economic system in which people and firms make all economic decisions.
Distribution of income
A way in which the nation's income is divided around families, individuals, or other designated groups.
Absolute Advantage.
Country's ability to produce more of a given product than another country can produce.
Grant-in-aid?
Transfer payment from one level of government to another that does not involve compensation.
Financial System
Network of savers, investors, and financial institutions working together to transfer savings for investment uses.
Demand Curve?
A curve that shows the quantities demanded at all possible prices.
Mandatory Spending
Federal spending authorized by law that continues without the need for annual approvals by Congress.
Comparative Advantage.
Country's ability to produce a given product relatively more efficiently than another country by doing it at a lower opportunity cost.
Federal Reserve System (Fed)?
Privately owned, publicly controlled central bank of the United States.
Economic Model
A simplified version of a complex behavior expressed in the form of an equation, graph, or illustration.
Law of Demand?
Rule stating that consumers will buy more of a product at lower prices and less at higher prices.
Budget Surplus
A positive balance after expenditures are subtracted from revenues.
Revenue Tariff.
Tax placed on imported goods to raise revenue.
Subsistence?
State in which a society produces only enough to support itself.
Equilibrium Price
Price where quantity supplied equals quantity demanded.
Marginal Utility?
Additional satisfaction or usefulness a consumer gets from having one or more unit of a product.
Budget Deficit
A negative balance after expenditures are subtracted from revenues.
Protective Tariff.
Tax on an imported product designed to protect less-efficient domestic producers.