Economics Unit 15: The Federal Reserve System

Economics – The study of how people exchange goods and services
human resources – physical and mental efforts of people used to produce goods and services
Productivity – Refers to the quantity of output produced for each hour of work of the working population.
deteriorating terms of trade – where the average price of exports falls relative to the average price of imports
Demand – consumer willingness and ability to buy products
price fixing – conspiring among or between businesses to set the prices of competing products
Interest – A payment, per unit of time, for the use of borrowed money (borrowers pay interest, lenders receive interest.)
Income – inflow of wages rent interest, profit earned abroad minus the same income factors are sent abroad
price taker – business that accepts market price determined by supply and demand
Council of Economic Advisers – a group of economic advisors to the president
Refer to Figure 17. If the government delays Gigacom's entry and Xenophone moves first, what is the likely outcome in the market?
Market – Any arrangement that allows buyers and sellers to exchange things.
voluntary exchange – the act of buyers and sellers freely and willingly engaging in non-fraudulent market transactions. Both parties should benefit from the exchange.
Refer tо Figure 17. If the gоvernment delаys Gigаcоm's entry аnd Xenophone moves first, what is the likely outcome in the market?
Budget Surplus – A budget outcome where government spending is less than revenue
Human capital – The skills, abilities, motivation and knowledge of labour. Improvements in human capital raise productivity and can shift PPB to the right
pure centrally planned economy – An economic system in which all resources are government-owned and production is coordinated by the central plans of government

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