BAM: Chapter 3 Vocabulary Flashcards

Questions and Answers

What is the efficient use of resources?

Productivity

Resources

Economy (correct)

Infrastructure

What are resources?

Materials found in the Earth that people need and value

What are the factors of production?

Land, labor, and capital

What is infrastructure?

The stock of basic facilities and capital equipment needed for the functioning of a country or area Signup and view all the answers

Define entrepreneurship.

The process of getting into and operating one's own business Signup and view all the answers

What does scarcity mean?

A small and inadequate amount Signup and view all the answers

What is a traditional economy?

An economic system that relies on habit, custom, or ritual to decide questions of production and consumption Signup and view all the answers

Define a market economy.

An economic system in which decisions on production and consumption are based on voluntary exchange in markets Signup and view all the answers

What is a command economy?

An economic system in which the government controls a country's economy Signup and view all the answers

What is productivity?

The degree to which resources are being used efficiently to produce goods and services Signup and view all the answers

Define Gross Domestic Product (GDP).

Measure of the dollar amount of all final goods and services produced within a country's borders in a year Signup and view all the answers

What is Gross National Product (GNP)?

The total value of goods and services produced by residents of a country within a specific time period Signup and view all the answers

What does inflation refer to?

A general and progressive increase in prices Signup and view all the answers

What is the Consumer Price Index (CPI)?

Shows changes in the average prices of goods and services purchased by consumers over a period of time Signup and view all the answers

Define the Producer Price Index (PPI).

Measures wholesale price levels in the economy Signup and view all the answers

What is the business cycle?

Recurring fluctuations in economic activity consisting of recession and recovery Signup and view all the answers

What does expansion mean in economics?

The act of increasing (something) in size, or volume, or quantity, or scope Signup and view all the answers

What is a recession?

The state of the economy declines Signup and view all the answers

Define depression in economic terms.

A long-term economic state characterized by unemployment and low prices Signup and view all the answers

What is meant by recovery in economics?

Return to an original state Signup and view all the answers

Study Notes

Economic Concepts

Economy: Emphasizes resource efficiency in production and consumption processes.
Resources: Essential materials sourced from Earth that hold value and utility for human needs.
Factors of Production: Comprises land, labor, and capital, forming the foundational groups of resources for producing goods and services.

Economic Systems

Traditional Economy: Relies on customs and rituals to make decisions regarding production and consumption, often seen in agrarian societies.
Market Economy: Characterized by voluntary exchange where market forces determine production and consumption choices.
Command Economy: Government regulation dictates economic activities and resource allocation.

Economic Indicators

Gross Domestic Product (GDP): Represents total dollar value of final goods and services produced within a nation's borders in one year.
Gross National Product (GNP): Measures total value of goods and services including overseas income generated by a nation's residents over a year.
Consumer Price Index (CPI): Tracks average price changes of consumer goods and services over time, indicative of inflation.
Producer Price Index (PPI): Assesses wholesale price changes, providing insights into manufacturing cost dynamics.

Economic Activity Fluctuations

Business Cycle: Describes the cyclical trend of economic activities, including phases of recession, recovery, and growth.
Expansion: A phase marked by an increase in economic activities, size, and scope.
Recession: Identified by a decline in economic performance and activity.
Depression: A prolonged period of economic downturn characterized by high unemployment, low prices, and diminished trade and investment.
Recovery: Refers to the phase of returning to previous economic performance after a downturn.

Economic Efficiency

Productivity: Indicates how effectively resources are utilized for producing goods and services; higher productivity suggests more efficient resource use.
Scarcity: Refers to inadequate supply relative to demand, highlighting the necessity for efficient resource management.
Inflation: Describes a continuous rise in general price levels, impacting purchasing power and economic stability.

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Description

Test your knowledge of key economic terms in Chapter 3 of BAM. This quiz covers essential vocabulary including 'Economy', 'Resources', and 'Factors of Production'. Prepare to enhance your understanding of fundamental economic concepts!