Glossary from chapter 1 Welcome to Economics of the book OpenStax, Principles of Macroeconomics for AP® Courses
This glossary was extracted from Chapter 1 of the book OpenStax, Principles of Macroeconomics for AP® Courses. OpenStax CNX. 4 Aug 2017 which is licensed under a Creative Commons Attribution 4.0 International License.
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a diagram that views the economy as consisting of households and firms interacting in a goods and services market and a labor market
an economy where economic decisions are passed down from government authority and where resources are owned by the government
the way in which the work required to produce a good or service is divided into tasks performed by different workers
the study of how humans make choices under conditions of scarcity
when the average cost of producing each individual unit declines as total output increases
products (goods and services) made domestically and sold abroad
economic policies that involve government spending and taxes
the trend in which buying and selling in markets have increasingly crossed national borders
a market in which firms are sellers of what they produce and households are buyers
measure of the size of total production in an economy
products (goods and services) made abroad and then sold domestically
the market in which households sell their labor as workers to business firms or other employers
the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance.
interaction between potential buyers and sellers; a combination of demand and supply
an economy where economic decisions are decentralized, resources are owned by private individuals, and businesses supply goods and services based on demand
the branch of economics that focuses on actions of particular agents within the economy, like households, workers, and business firms
policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing
system where the means of production (resources and businesses) are owned and operated by private individuals or groups of private individuals
when human wants for goods and services exceed the available supply
when workers or firms focus on particular tasks for which they are well-suited within the overall production process
a representation of an object or situation that is simplified while including enough of the key features to help us understand the object or situation
typically an agricultural economy where things are done the same as they have always been done
a market where the buyers and sellers make transactions in violation of one or more government regulations