Glossary Terms:

CPI- The Crystal Ball

Glossary terms from:
http://www.econedlink.org/e255


Business

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

Consumers

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

Distribution

The allocation or dividing up of the goods and services a society produces.

Expenses

Payments for goods and services.

Federal Income Tax

A tax paid by individuals and businesses to the federal government to fund such services as national defense, human services, and the monitoring and regulation of trade.

Federal Reserve

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.

Goods

Tangible objects that satisfy economic wants.

Income

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

Inflation

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).

Innovation

A new idea or method.

Interest

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

Job

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

Labor

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

Labor Market

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.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Price

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.

Profit

Income received for entrepreneurial skills and risk taking, calculated by subtracting all of a firm's explicit and implicit costs from its total revenues.

Purchasing Power

The amount of goods and services that a monetary unit of income can buy.

Salaries

Payments for labor resources; unlike wages, not explicitly based on the number of hours worked. See also Wages.

Services

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

Social Security

A federal system of old-age, survivors', disability and hospital care (Medicare) insurance which requires employers to withhold (or transfer) wages from employees' paychecks and deposit that money in designated accounts.

Wage

Payments for labor services that are directly tied to time worked, or to the number of units of output produced.

Work

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.

Workers

People employed to do work, producing goods and services.