Macroeconomics - The study of the sum total of economic activity, dealing with the issues of growth, inflation0 and unemployment and with national economic policies relating to these issues.
Microeconomics - The study of the individual parts of the economy, the household and the firm, how prices are determined and how prices determine the production, distribution and use of goods and services.
opportunity cost - is the next best alternative which is foregone whenever an economic decision is made.
Traditional economy - economic system in which decisions such as the who, how, what, and for whom questions are all made on the basis of customs, beliefs, religion, habit, etc.
Command economy- where the resources are state owned and their allocation and use is determined by the centralized decisions of a planning authority
Market Economy - Free, private enterprise economy governed by the laws of supply and demand
Profit - net income: the excess of revenues over outlays in a given period of time
Elasticity of Demand - measures the responsiveness of the quantity demanded of a good to its price
Law of supply - sellers will offer more of a good at a higher price and less at a lower price
Law of Demand - states that as price decreases, quantity demanded increases
Bull Market- Any market in which prices are in an upward trend.
Bear Market - market in which prices are in a declining trend.
sole proprietorship is a business owned and operated by one individual.
Partnership - a form of business organization in which two or more persons join in a business or commercial enterprise, sharing profits, risks and losses according to the terms set forth in their partnership contract.
Stock - the capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity); "he owns a controlling share of the company's stock"
Bond - A certificate of debt issued to raise funds. Bonds typically pay a fixed rate of interest and are repayable at a fixed date
Primary Stock Market - The first buyer of a newly issued security buys that security in the primary market
Secondary Market - A market that provides for the purchase or sale of previously sold or bought options through closing transactions
Securities and Exchange Commission (SEC): A government agency responsible for the supervision and regulation of the securities industry.
Assets - Items which hold commercial or exchange value.
Liabilities - The debts of a person or business.
Cash Flow - The debts of a person or business.
Profit - net income: the excess of revenues over outlays in a given period of time
Production - output: the quantity of something (as a commodity) that is created (usually within a given period of time)
Productivity - A measurement of output per hours worked.
GDP - GDP is the total value of goods and services produced by a nation
Pure Price Competition - Competition among firms by reducing price, as opposed to by changing characteristics of the product
Oligopoly - A market structure with just a few firms controlling a high percentage of total sales, such as car manufacturing.
Monopoly - A market type in which there is a sole supplier of a good, service, or resource that has no close substitutes and in which there is a barrier preventing the entry of new firms into the industry.
Vertical Merger - Usually each member of the hierarchy produces a different product, and the products combine to satisfy a common need.
Horizontal Merger - Occurs when one firm purchases other firms that produce similar or competing products
Trademark - A name, symbol, or other device identifying a product, officially registered and legally restricted to the use of the owner or manufacturer.
Patent - a document granting an inventor sole rights to an invention
Copyright - a document granting exclusive right to publish and sell literary or musical or artistic work
Economies of Scale - Savings achieved in the cost of production by larger enterprises because the cost of initial investment can be defrayed across a greater number of producing units
Progressive tax - a tax that charges a higher percentage of income as income rises
Proportional Tax - a tax that charges the same percentage of income, regardless of the size of income
Regressive Tax - a tax such as a sales tax that applies equally to every purchaser but which results in taking a larger percentage of income from a low-income person than from a high-income person
Value-added tax - A tax imposed on value added, that is, on the difference between the cost of materials purchased by a firm and the price for which it sells goods produced using those materials.
Excise Tax - A tax on consumption of a particular good.
External Cost - negative side-effect of an economic transaction, an act of exchange, consumption, or production
Federal Reserve System - The central banking system of the US comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership of the Fed is compulsory for banks chartered by the Comptroller of Currency and optional for state chartered banks.
Monetary policy - Actions by the Federal Reserve System to influence the cost and availability of credit, with the goals of promoting economic growth, full employment, price stability and balanced trade with other countries.
Fiscal Policy - The federal government's decisions about the amount of money it spends and collects in taxes to achieve full employment and non-inflationary economy
Discount rate - The interest rate used in calculating the present value of expected yearly benefits and costs.
Reserve Ratio - The ratio of a commercial bank's reserves to its deposits.
Frictional Unemployment - unemployment associated with people moving from one job to another or moving into the labor force
Structural Unemployment - The unemployment that arises when there is a decline in the number of jobs available in a particular region or industry.
Cyclical Unemployment - The portion of unemployment that is due to the business cycle and thus rises in recessions but then disappears eventually after the recession ends.
Full Employment - the economic condition when everyone who wishes to work at the going wage rate for their type of labor is employed
open-market operations - central banks’ purchase or sale of government bonds in the open market
Tariff - A duty(or tax) applied to goods transported from one country to another, or on imported products
Quotas - limits on the amount of foreign goods that can be imported
Stagflation - The combination of a rise in the price level and a fall in real GDP.
Karl Marx - Marx: founder of modern communism; wrote the Communist Manifesto with Engels in 1848; wrote Das Kapital in 1867 (1818-1883)