Supply/Demand
The willingness and ability of a producer to produce and sell a product
Supply
A fee charged for goods brought into a country from another country.
Contributed to the Division of Labor, gross domestic product (GDP) and the invisible hand.
Adam Smith
A business owned and controlled by one person.
Sole Proprietorship
A visualization of all interactions in a market economy.
Circular Flow Model
The desire to have some good or service and the ability to pay for it.
Demand
A tax based on the value of goods or services at the time of sale.
Sales Tax
The idea, first advanced by John Maynard Keynes, that the government needs to stimulate aggregated demand in times of recession.
Keynesian Economics
A prolonged economic contraction lasting two or more quarters.
Recession
A period during which prices rise at the same time that there is a slowdown in business activity.
Stagflation
All the resources people make and use to produce and distribute goods and services.
Capital
A tax on the production or sale of a specific good or service.
Excise Tax
Developed an economic theory that the government should intervene to stabilize the economy, and that aggregate demand was a driving force behind economic activity.
John Maynard Keynes
A situation that exists when there are not enough resources to meet human wants
Scarcity
A situation in which producers in one nation depend on others to provide goods and services they do not produce.
Economic Interdependence
The ability of one trading nation to produce something at a lower opportunity cost than that of another trading nation
Comparative Advantage
The sum of all the supply or demand in the economy.
Aggregate
Best known for his development of monetarism, an economic theory that emphasizes the role of government in controlling the amount of money in circulation as a means to regulate economic activity.
Milton Friedman
A business owned by shareholders, also called stockholders, who own the rights to the company's profits but face only limited liability for the company's debts and losses.
Corporation
Another name for capitalism, an economic system based on private ownership of productive resources.
Free Enterprise System
The value of something that is given up by choosing one alternative over another.
Opportunity Cost
An investment company that gathers money from individual investors and uses the money to purchase a range of financial assets.
Mutual Fund
Best known as the "Father of Neo-liberalism" and his belief in free market capitalism. Critiqued Keynesian economics.
Fredrich Hayek
A business co-owned by two or more people who agree on how responsibilities, profits, and losses should be divided.
Partnership
A system in which the basic monetary unit is equal to a set amount of gold, ended August 15, 1971.
Gold Standard