Arkansas Marketing Unit 4 Economics Foundation

Balance of Trade
the difference between the amount of a country’s imports and exports
Business Cycles
recurring changes in an economy
Capital
money needed to start and operate a business
Capitalism
an economic system where resources are owned by individuals, the marketplace answers the economic questions; also known as free enterprise or market economy
Command/Controlled Economy
an economic system where resources are owned by the government and the government answers the economic questions
Consumer Price Index (CPI)
the change in the cost of a specified set of goods and services over time
Demand
the consumer willingness and ability to buy products
Depression/Trough
a period of prolonged recession
Economic Utilities
attribute of a product or service that makes it capable of satisfying consumers wants and needs
Economy
the way a nation makes economic choices about how the nation will use its resources to produce and distribute goods and services
Elastic Demand
market situation in which a price decrease will increase revenue
Embargo
a government prohibition against the shipment of certain products to a particular country for economic or political reasons
Entrepreneurship
the skills of people who are willing to risk their time and money to run a business
Equilibrium
exists when the amount of product supplied is equal to the amount of product demanded
Factors of Production/Economic Resources
all things used in producing goods and services
Gross Domestic Product (GDP)
the total value of goods and services produced within a country during the year
Inelastic Demand
market situation in which a price decrease will decrease revenue
Inflation
when prices increase faster than the value of goods and services
Labor/Human
all the people who work in the economy
Land/Natural
all the natural resources of a nation
Productivity
the average output by workers for a specific period of time
Prosperity/Expansion
time when the economy is flourishing
Quotas
limits on the numbers of specific types of products that foreign companies can sell in the country
Recession
a period of economic slowdown
Resources
also called factors of production, are all the things used in producing goods and services
Scarcity
difference between what consumers want and need and what the available resources are
Shortage
when demand exceeds supply
Supply
the amount of goods producers are willing to make and sell
Surplus
occurs when supply exceeds demand
Tariffs
taxes placed on imported products to increase the price for which they are sold
Unemployment Rate
the percentage of the work force that is unemployed at any given date