Economic Resources | There are three: Natural Resources, Labour, and Capital Equipment. |
Inputs | Another name for "Economic Resources" - Natural Resources, Labour, and Capital Equipment |
Labour | The largest single productive input available to any economy, it includes all the productive talents of the people of a society, mental as well as physical. |
Capital Equipment | The tools, equipment, machinery, and factories used to increase production per worker |
Productivity | Output per worker per hour; one measure of efficiency |
Standard of Living | A measure of the economic prosperity of a people of a society, usually expressed in terms of the value of goods and services consumed per person per year. |
Natural Resources | The short form for this term is "land" and are the resources available to a society economy as economic inputs that come from the land. |
Economic outputs | The goods and services produced by a society using its productive inputs. |
Scarcity | The problem that, while economic inputs are limited in availability, people's wants and needs are unlimited. |
Effectiveness | A measure of how well an economy performs in terms of producing goods and services that meet the needs and wants of people. |
Efficiency | A measure of how well an economy performs in terms of producing high volumes of goods and services at a low cost per item. |
Opportunity Cost | The concept that the real economic cost of producing something is the forgone opportunity to produce something else that could have been produced with the same inputs. |
Three Basic Question of Economics | What to produce? How to produce it? Who gets how much? |
Consumer Goods | Goods produced for present consumption and are used up quickly. |
Capital Goods | Things that help produce other valuable goods and services in the future. They are not "used up" today but they will increase productive efficiency. |
Market System | An economic system in which economic decisions are made in a decentralized manner mainly by consumers and privately owned businesses. |
Market | It is where buyers and sellers come together to exchange goods and services. |
Profits | They are funds left from a business's sales revenues after all expenses have been paid. |
Recession | A period when the economy is producing considerably less than its potential output, and unemployment is high. Formally defines as two consecutive quarters (six months) of declining output. |
Private Sector | This is businesses and producers that are privately owned and make up about 80% of Canada's economy. |
Government Sector | In this sector, the key economic decisions are made by governments and in Canada makes up about 20% of the annual output of the economy. |
Subsidies | Government financial assistance to a firm or industry, through grants, loans or reduced taxes. |
Gross Domestic Product (GDP) | The total value of new goods and services produced in a country in one year. |
Macroeconomics | The study of the economy as a whole, including inflation, unemployment, and economic growth |
Microeconomics | The study of a single factor of an economy - such as individuals, households, businesses, specific markets, & industries - rather than an economy as a whole. |
Aggregate Demand | The amount of goods and services in the economy that will be purchased at all possible price levels |
Supply Side of a Market | It is the side of a market system where seller compete to make sales. |
Demand Side of a Market | It is the side of a market system where buyers compete to acquire goods and services at a reasonable rate. |
Economic Boom | It is high levels of output and employment in the economy as a whole. |
Inflation | It is an increase in the general level of the prices of goods and services. |
Capacity Output | It is the maximum amount of output the economy can produce without generating excessively rapid increase in production costs and prices. |
Full Employment | It is the lowest rate of unemployment that can be achieved without generating unacceptable inflation in the economy. |
Consumer Price Index (CPI) | It is an index of the cost of all goods and services to a typical consumer. It measures changes in the price level of a market basket of consumer goods and services purchased by households. |
GDP Calculation | It is Consumption + Investment + Government + Net Exports (the total value of all Canadian exports - the total value of all imports) ... C+I+G+(X-M) |
Consumption | It is a category of the GDP that consists of all consumer goods and services purchased by households. |
Investment | As part of the GDP, it includes all additions to society's stock of privately owned capital equipment, buildings, and inventories of products. |
Net Exports | It is the part of the GDP that is the total value of all Canadian exports (X) minus the total value of all imports (M); X-M |
Real Income | It is the purchasing power of income; income that is adjusted for prices changes, and implies the actual buying power of a consumer |
Money GDP | GDP in current dollar terms; that is, including any price increases due to inflation |
Real GDP | GDP statistic that have been adjusted to eliminate the effects of price increases, the result of being a statistic that measure only changes in real output of an economy; GDP adjusted for inflation |
Rate of Inflation | The annual % rate of change in the price level, as measured, for example, by the CPI. |
Free Enterprise System | Market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention |
Command Economic System | Economic system in which the *government controls the economy*. The state decides how to use and distribute resources, regulates prices and wages, and may even determine what sorts of work individuals do. |
Capitalism | An economic system based on private property and free enterprise. |
Mixed Economic System | Economic system that *combines elements of the market and command economy*. Many economic decisions are made in the market by individuals but the government also plays a role in the allocation and distribution of resources. |
Economics | The study of people and the choices they make. |
Economic Incentive | Reward for engaging in a specific economic activity |
Specialization | It is the concentration of the productive efforts of individuals and businesses on a limited number of activities to improve productivity |
Law of Demand | If the price goes up, people will buy less and if the price goes down, people will want more. |
Law of Supply | If the price goes up, the producer will want to make more and if the price goes down, the producer will want to sell less. |
Shortage | It is a mismatch because there is a high demand but a low supply. |
Surplus | A situation in which the quantity supplied is greater than the quantity demanded |
GDP per capita | Gross domestic product divided by the number of people in the population. |
Technology (in Economic terms) | It is the ways you combine labour and capital to be for productive. |
Depression (in Economic terms) | It is a severe recession. |
Unemployment Rate | It is the percentage of the labor force that is unemployed |
Discouraged Worker | People who are available for work but have not looked for a job during the previous four weeks because they believe no jobs are available for them. |
Natural Rate of Unemployment | It is the normal rate of unemployment around which the unemployment rate fluctuates |
Frictional Unemployment | A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs. |
Structural Unemployment | A type of unemployment caused by a fundamental change in the economy that reduces the demand for some workers |
Cyclical Unemployment | A type of unemployment that rises during economic downturns and falls when the economy improves |