![]() ![]() Barriers to entry tend to be virtually insurmountable. Monopoly A market structure with one producer completely dominating the industry, leaving no room for any significant competitors. Monopolistic Competition A market structure with many competitors selling differentiated products. Money Supply The total amount of money within the overall economy. Money Anything generally accepted as a medium of exchange, a measure of value, or a means of payment. Monetary Policy Federal Reserve decisions that shape the economy by influencing interest rates and the supply of money. Mixed Economies Economies that embody elements of both planned and market-based economic systems. Microeconomics The study of smaller economic units such as individual consumers, families, and individual businesses. Macroeconomics The study of a country's overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies. M2 Money Supply Includes all of M1 money supply plus most savings accounts, money market accounts, and certificates of deposit. M1 Money Supply Includes all currency plus checking accounts and traveler's checks. Inflation A period of rising average prices across the economy. Hyperinflation An average monthly inflation rate of more than 50 percent. Gross Domestic Product (GDP) The total value of all final goods and services produced within a nation's physical boundaries over a given period of time. Fiscal Policy Government efforts to influence the economy through taxation and spending. Federal Debt The sum of all the money that the federal government has borrowed over the years and not yet repaid. Expansion A period of robust economic growth and high employment. Equilibrium Price The price associated with the point at which the quantity demanded of a product equals the quantity supplied. Economy A financial and social system of how resources flow through society, from production, to distribution, to consumption. Economies The study of the choices that people, companies, and governments make in allocating society's resources. Economic System A structure for allocating limited resources. Disinflation A period of slowing average price increases across the economy. Discount Rate The rate of interest that the Federal Reserve charges when it loans funds to banks. Depression An especially deep and long-lasting recession. Demand Curve The graphed relationship between price and quantity from a customer demand standpoint. Demand The quantity of products that consumers are willing to buy at different market prices. Deflation A period of falling average prices across the economy. Contraction A period of economic downturn, marked by rising unemployment and falling business production. Contract An agreement that is legally enforceable. Consumer Price Index (CPI) A measure of inflation that evaluates the change in the weighted-average price of goods and services that the average consumer buys each month. Communism An economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government. Commercial Banks Privately owned financial institutions that accept demand deposits and make loans and provide other services for the public. Capitalism An economic system?also known as the private enterprise or free market system?based on private ownership, economic freedom, and fair competition. ![]() Business Cycle The periodic contraction and expansion that occur over time in virtually every economy. Budget Surplus Overage that occurs when revenue is higher than expenses over a given period of time. ![]() Budget Deficit Shortfall that occurs when expenses are higher than revenue over a given period of time. (Repeat) Keep in mind that productivity does: NOT measure quality. The Business Cycle "pattern" is: Peak, Contraction, trough, recovery, expansion.
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