Budget Deficit
The condition in which a nation spends more than it takes in from taxes.
Business
Individuals or organizations who try to earn a profit by providing products that satisfy people's needs.
Capitalism (Free Enterprise)
An economic system in which individuals own and operate the majority of businesses that provide goods and services.
Communism
First described by Karl Marx as a society in which the people, without regard to class, own all the nation's resources.
Competition
The rivalry among business for consumers' dollars.
Demand
The number of goods and services that consumers are willing to buy at different prices at a specific time.
Depression
A condition of the economy in which unemployment is very high, consumer spending is low, and business output is sharply reduced.
Economic Contration
A slowdown of the economy characterized by a decline in spending and during which businesses cut back on production and lay off workers.
Economic Expansion
The situation that occurs when an economy is growing and people are spending more money; their purchases stimulate the production of goods and services, which in turn stimulates employment.
Economic System
A description of how a particular society distributes its resources to produce goods and services.
Economics
The study of how resources are distributed for the production of goods and services within a social system.
Entrepreneur
An individual who risks his or her wealth, time, and effort to develop for profit an innovative product or way of doing something.
Equilibrium Price
The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.
Financial Resources
The funds used to acquire the natural and human resources needed to provide products; also called capital.
Free-Market System
Pure-capitalism, in which all economic decisions are made without government intervention.
Gross Domestic Product (GDP)
The sum of all goods and services produced in a country during a year.
Human Resources
The physical and mental abilities that people use to produce goods and services; also called labor
Inflation
A condition characterized by a continuing rise in prices.
Mixed Economies
economies made up of elements from more that one economic system.
Monopolistic Competition
The market structure that exists when there are fewer businesses than in a pure-competition environment and the differences among the goods they sell are small.
Monopoly
The market structure that exists when there is only one business providing a product in a given market.
Natural Resources
Land, forests, minerals, water, and other things that are not made by people.
Nonprofit Organizations
Organizations that may provide goods and services but do not have the fundamental purpose of earning profits.
Oligopoly
The market structure that exists when there are very few businesses selling a product.
Product
A good or service with tangible and intangible characteristics that provide satisfaction and benefits.
Profit
The difference between what it costs to make and sell a product and what a customer pays for it.
Pure Competition
The market structure that exists when there are many small businesses selling one standardized product.
Recession
A decline in production, employment, and income.
Socialism
An economic system in which the government owns and operates basic industries but individuals own most businesses.
Stakeholders
Groups that have a stake in the success and outcomes of a business.
Supply
The number of products (goods and services) that businesses are willing to sell at different prices at a specific time.
Unemployment
The condition in which a percentage of the population wants to work but is unable to find jobs.