Marketing – Vocabulary – Chapter 3

economy
organized way a nation provides for the needs and wants of its people
resources
all things used in producing goods and services
factors of production
land, labor, capital, entrepreneurship
infrastructure
physical development of a country
entrepreneurship
skills of people willing to invest time & money to run a business
scarcity
not enough; difference between needs & wants and available resources
traditional economy
traditions & rituals decide what, how, & for whom things will be produced
market economy
no government is involved in economic decisions
command economy
governement decides what, when, how much will be produced & distributed
land
everything contained in earth or found in seas
labor
all people who work
capital
money, factories, buildings, tools, raw materials, goods used in production process
approaches
ways of handling a situation
theory
idea that explains something and is supported by data
transition
a change from one state or condition to another
productivity
output per worker hour measured over a period of time
GDP (Gross Domestic Product)
output of goods & services produced in a country in a year
invest
put money into hoping it will earn more money
GNP (Gross National Product)
total dollar value of goods & services produced by a nation at home or away
inflation
rising prices
CPI (Consumer Price Index)
measures the change in consumer price over a period of time
PPI (Producer Price Index)
measures wholesale levels in the economy
business cycle
recurring changes in economic activity (expansion, recession, depression, recovery)
expansion
period of prosperity and growth
recession
period of economic slow-down that lasts at least 6 months
depression
long period of recession (high unemployment, businesses close, customers don’t buy, production drops)
recovery
period of renewed economic growth following a recession or depression
economic questions
What, How, Who receives?