UNIT 5 V OCABULARY ECONOMICS

Study of how goods and services are produced and sold

S TANDARD OF L IVING Measured by standards of income per person and poverty rate Defines the ways of life people are used to living according to their personal income

C APITALISM Economic system where means of production and distribution are privately owned and operated for a private profit Based on private ownership and on investment of money

F REE E NTERPRISE Market without intervention and regulation by the government except to enforce property rights AKA Free Market

C OMPETITION Individuals and firms striving for a greater share of a market to sell or buy goods and services Causes commercial firms to develop new products, services and technologies GTypically causes lower prices for products ive consumers greater selection and better products

G LOBAL T RADE Exchange of capital, goods, and services across international borders or territories Represents a significant share of gross domestic product (GDP) Without nations would be limited to the goods and services produced within their borders

C OMMUNISM Economic system in which all means of production are owned by the people Includes: land, mines, factories, railroads, business Private property does not exist All goods and services are shared equally

S OCIALISM Economic system in which factors of production are owned by the public and operate for the welfare of all

M IXED E CONOMY Economy that includes a variety of private and government control Mix of capitalism and socialism

D EVELOPED C OUNTRY Countries with high level of development High level of : GDP (gross domestic product) Income per capita Industrialization Human Development Index (life expectancy/education)

D EVELOPING C OUNTRY Countries with low level of material well being Not third world countries Levels of development vary widely among countries Some have high average standards f living If almost developed characterized as newly industrialized countries

N ATURAL R ESOURCES Things found in nature and used in production

S CARCE Limited supply

M ERCANTILISM Idea that a country could become strong if it stored up a great deal of wealth Government make all economic decisions

F EUDALISM Economic system based on production during the Middle ages Feudal lord was in charge of the people and means of production

C ONSUMERS Buy goods and services that are produced in the economy

I NCOME Amount of money earned through labor