Glossary Terms:

One of many choices or courses of action that might be taken in a given situation.

Any activity or organization that produces or exchanges goods or services for a profit.

Fluctuations in the overall rate of national economic activity with alternating periods of expansion and contraction; these vary in duration and degrees of severity; usually measured by real gross domestic product (GDP).

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Resources made and used to produce and distribute goods and services; examples include tools, machinery and buildings.

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Spending by households on goods and services. The process of buying and using goods and services.

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Money owed to someone else. Also the state or condition of owing money. Can be individual, corporate or government debt.

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Unemployed people who have given up looking for work and are therefore not counted as part of the labor force.

Goods intended to last for a period of more than three years.

The central bank of the United States. Its main function is controlling the money supply through monetary policy. The Federal Reserve System divides the country into 12 districts, each with its own Federal Reserve bank. Each district bank is directed by its nine-person board of directors. The Board of Governors, which is made up of seven members appointed by the President and confirmed by the Senate to 14-year terms, directs the nation's monetary policy and the overall activities of the Federal Reserve. The Federal Open Market Committee is the official policy-making body; it is made up of the members of the Board of Governors and five of the district bank presidents.

The natural rate of employment; generally considered to be about 93-95 percent of the labor force, allowing for frictional unemployment of 5-7 percent.

Tangible objects that satisfy economic wants.

The market value of all final goods and services produced in a country in a calendar year.

Individuals and family units that buy goods and services (as consumers) and sell or rent productive resources (as resource owners).

Accommodation in houses, apartments, etc.

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation).

Money paid regularly, at a particular rate, for the use of borrowed money.

The price paid for using someone else's money, expressed as a percentage of the amount borrowed.

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.

A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.

The quantity and quality of human effort available to produce goods and services.

The people in a nation who are aged 16 or over and are employed or actively looking for work.

The labor supply and labor demand curves. The intersection of the labor supply and labor demand curves determines the equilibrium wage and the quantity of hours people work at this equilibrium wage.

Economic variables such as unemployment claims, manufacturers' new orders, stock prices, and new plant and equipment orders that tend to change before real output changes.

Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.

A job or profession; also a category of work, sometimes identified by the degree of skill required.

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

A good or service that can be used to satisfy a want.

The amount of output (goods and services) produced per unit of input (productive resources) used.

A decline in the rate of national economic activity, usually measured by a decline in real GDP for at least two consecutive quarters (i.e., six months).

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

Activities performed by people, firms or government agencies to satisfy economic wants.

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

The number of people without jobs who are actively seeking work.

The number of unemployed people, expressed as a percentage of the labor force.

Effort applied to achieve a purpose or result, often for pay; skills and knowledge put to use to get something done; employment at a job or in a position; occupation, profession, business, trade, craft, etc.

People employed to do work, producing goods and services.