Glossary Terms:

Was Babe Ruth Under Paid?

Glossary terms from:
http://www.econedlink.org/e604


Bank

A financial institution that provides various products and services to its customers, including checking and savings accounts, loans and currency exchange.

Consumer Price Index (CPI)

A price index that measures the cost of a fixed basket of consumer goods and services and compares the cost of this basket in one time period with its cost in some base period. Changes in the CPI are used to measure inflation.

Economics

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

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).

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.

Price Level

The weighted average of the prices of all goods and services in an economy; used to calculate inflation.

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.

Salary

A regular payment, often at monthly or biweekly intervals, made by an employer to an employee, especially in the case of professional or white-collar employees. Salaries are paid for services rendered and are not based on hours worked.

Services

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

Workers

People employed to do work, producing goods and services.