Economic System
This economic system relies entirely on the forces of supply and demand with no government control over businesses or pricing
Free Market
The quantity of a good or service that people are willing and able to buy at various prices.
The total market value of all final goods and services produced within a country's borders during a specific time period.
What is Gross Domestic Product (GDP)?
The highest point of economic activity in the business cycle before a downturn begins.
What is the peak?
The fundamental economic problem that arises because human wants are unlimited but resources are finite.
What is Scarcity?
In this system, a centralized government body makes all decisions regarding the production, distribution, and pricing of goods.
Command
This economic law states that as the price of an item goes up, the quantity supplied by producers typically increases.
What is the Law of Supply?
A monthly measure of the average change over time in the prices paid by urban consumers for a market basket of goods.
What is the Consumer Price Index (CPI)?
A period of economic decline marked by falling GDP, typically defined by at least two consecutive quarters of contraction.
What is a recession?
The value of the next best alternative given up when a choice is made.
What is opportunity cost?
The most common system today, it blends elements of private enterprise with public oversight and public-sector industries.
What is a Mixed Economy?
The specific price point where the quantity demanded by consumers exactly equals the quantity supplied by producers.
What is the Equilibrium Price (or Market Price)?
This key monthly metric measures how optimistic or pessimistic people are regarding their expected financial situation and the stability of the economy.
What is the Consumer Confidence Index?
The lowest point of economic activity in the business cycle, where contraction hits bottom and turns back toward growth.
What is a trough?
This branch of economics focuses on the choices made by individual consumers, households, and specific businesses.
What is Microeconomics?
This system allocates resources based on long-standing customs, history, and beliefs, often relying on farming, fishing, or hunting.
What is a Traditional Economy
A market structure featuring a large number of buyers and sellers where no single participant can control the market price.
What is a Competitive Market (or Perfect Competition)
This economic metric measures periods of inflation or deflation.
What is Consumer Price Index.
A period of growth in the GDP would be an indicator of?
What is expansion?
This branch of economics looks at the behavior of the economy as a whole, focusing on national metrics like inflation, unemployment, and GDP growth.
What is Macroeconomics?
The concept where production is divided into distinct, specialized tasks to improve efficiency and output, as seen on modern assembly lines.
What is the Division of Labor?