Brain Drain
The loss of the best and brightest people to other countries.
Business cycle
A common pattern in which there is a period of rapid economic growth (recovery and prosperity) when supply and demand stimulate each other, alternating with a period of decline (contraction or recession) with diminishing demand and supply.
Capitalism
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
Command Economies
Economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow.
Communism
An economic and political system in which the state (the government) makes all economic decisions and owns almost all the major factors of production, including housing for its people.
Consumer Price Index (CPI)
A set of monthly statistics that measures the pace of inflation or deflation.
Deflation
A general decline in the prices of goods and services over time.
Demand
The quantity of products people are willing and able to buy at different prices at a specific time.
Depression
A severe recession
Deregulation
The removal of government control and strict oversight in a market that thereby opens the market for other to enter.
Economics
The study of how individuals and society choose to use scarce resources to produce goods and services and distribute them for consumption.
Equilibrium Point
The point at which the amount of goods sought by buyers is equal to the amount of goods produced by suppliers.
Free Market
A system in which decisions about what to produce and in what quantities are made by the market.
Free-Market Economies
Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows.
Gross Domestic Product (GDP)
The total value of final goods and services produced in a country in a given year.
Gross National Product (GNP)
The value of goods and services produced by a country's factors of production, regardless of where these factors are based.
Inflation
A general rise in the prices of goods and services over time.
Interest Rates
A rate charged for using money.
Invisible Hand
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all.
Macroeconomics
The study of the operation of a nation's economy as a whole.
Microeconomics
The study of the behavior of people and organizations in particular markets.
Mixed Economics
Economic systems in which some allocation of resources is made by the market and some by the government.
Monetary Policy
The management of the money supply and interest rates by the Federal Reserve Bank.
Monopolistic Competition
A market condition in which a large number of business produce products that are very similar but are perceived by buyers as different.
Monopoly
A form of competition in which only one business controls the total supply of a product and its price.
National Debt
The sum of government deficits over time.
National Deficit
The money the federal government spends over and above its revenue for a specific period of time.
Oligopoly
A form of competition in which just a few businesses dominate a market.
Opportunity Cost
Refers to what you give up (your next best choice) in order to do or get something else (your chosen decision).
Perfect Competition
A market condition in which there are many businesses and no one business is large enough to dictate the price of a product.
Producer Price Index (PPI)
A set of monthly statistics that measures prices at the wholesale level.
Product Differentiation
An attempt to make buyers think similar products are different in some way.
Recession
A period during which the GDP of a nation declines for two or more quarters.
Recovery
A period following a recession during which an economy stabilizes and begins to grow again.
Resource Development
The study of how to increase resources and create the conditions that will make better use of those resources.
Socialism
An economic system based on the premise that some if not most, basic businesses should be owned by the government so profits can be evenly distributed among all people.
Stagflation
A situation where the economy is slowing but prices are rising.
Supply
The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.
Unemployment Rate
The number of civilians 16 years of age and older who are unemployed and have tried to find a job within the prior four weeks.