Economics Economy: A system of producing and distributing the goods and services of a society.

Resources People (Labor) Capital Natural Resources Other Resource Allocation

Consumers Consumers: People who use goods and services.

Goods and Services Consumer Goods: Goods produced for use by individuals and families. Consumer Services: Services such as medical care, education, and legal services.

Standard of Living Standard of Living: Measure of the quality of life based on a person’s income and material goods. Relative

Literacy Rate Literacy Rate: Percentage of population that can read and write.

Gross Domestic Product Gross Domestic Product: The total dollar value of all final goods and services produced by a country in a year.

Types of Economies: Traditional Traditional Economy: System in which the economy functions in the way it has for generations. Barter System: Goods and services are exchanged without the use of currency.

Types of Economies: Command Command Economy: Government controls most of the means of production. Central Planning Communist Socialist

Types of Economies: Free Market Free Market Economy/Capitalism: Buyers and sellers have economic freedom. Means to produce goods and services are owned by the people. Balance of production and consumption. Consumer Consumption Profit Competition

Imports and Exports Imports: To buy goods from another country. Exports: To trade goods to other countries. Why?

Supply and Demand Demand is that quantity of a good that consumers are not only willing to buy but also have the capacity to buy at the given price. Supply is the quantity that producers are willing to sell at a given price.

Supply & Demand Supply & Demand: The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand).

Trade Barriers Trade Barrier: Limits the amount of goods imported into a country. Embargo: Ban on trade. Quota: Number limit on imports. Tariffs: A tax added to the value of goods that are imported.

Markets Closed Markets: A market that is closed to outsiders. (embargo) Emerging Markets: A market that is developing, growing, or expanding.

Economic Cycles Inflation: An overall increase in the price of goods across the entire economy. Recession: An extended decline in general business activity. Depression: A period of drastic decline in national or international economy because of decreasing business activity, falling prices, and unemployment.

Inflation In economics, inflation is an increase in the general level of prices of a given kind in a given currency. Inflation is measured by taking a "basket" of goods, and comparing the prices at two intervals, and adjusting for changes in the intrinsic basket. General inflation is a fall in the purchasing power of money within an economy

Inflation

Recession Recession: a normal downturn in the business cycle. A fall of a country's real Gross Domestic Product in two or more successive quarters of a year.

Depression In economics, a depression is a term commonly used for a sustained downturn in the economy. It is more severe than a recession (which is seen as a normal downturn in the business cycle). Considered a rare but extreme form of recession, the start of a depression is characterized by unusual increases in unemployment, restriction of credit, shrinking output and investment, price deflation and/or hyperinflation, numerous bankruptcies, reduced amounts of trade and commerce.

Surplus Surplus: More of a product than is needed, extra.

Scarcity Scarcity/Scarce: Not enough of something to meet the needs and wants of people. Drought: Long periods of dry weather.

Economics Famine: great shortage of food.

RENEWABLE RESOURCES Resources such as trees, fish, oxygen, and fresh water are generally considered to be renewable resources as they can be continually reproduced.  Fresh water from the Earth's recycling process, fresh air from the oxygen produced by plants and trees, and trees and fish which can reproduce themselves.   

NON-RENEWABLE RESOURCES Such things as fossil fuels (oil, coal, gas) and minerals cannot be reproduced and therefore can be used up.* These are called non-renewable resources.

Currencies: The British pound.

Currencies: The Euro.