Glossary Terms:

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.

Money in the form of paper currency or coins (as distinct from checks, money orders or credit).

Economic variables, such as payroll employment, industrial production, personal income, and manufacturing and trade sales, that tend to change at the same time that real output changes.

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.

The opportunity to borrow money or to receive goods or services in return for a promise to pay later.

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

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

Goods and services produced in one nation and sold in other nations.

Something a person or organization plans to achieve in the future; an aim or desired result.

Tangible objects that satisfy economic wants.

Goods and services provided by government and paid for by taxing and borrowing. Federal government expenditures include national defense and a system of justice. State and local government expenditures include police, roads and public education.

Spending by all levels of government on goods and services; includes categories like military, schools and roads.

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

Accommodation in houses, apartments, etc.

Goods and services bought from sellers in another nation.

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).

A practice or arrangement whereby a company provides a guarantee of compensation for specified forms of loss, damage, injury or death. People obtain such guarantees by buying insurance policies, for which they pay premiums. The process allows for the spreading out of risk over a pool of insurance policyholders, with the expectation that only a few policholders will actually experience losses for which claims must be made. Types of insurance include automobile, health, renter's, homeowner's, disability and life.

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.

An itemized list of goods held by a person or business. Also a quantity of goods held in stock.

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.

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

Economic variables such as the prime interest rate, labor cost per unit of output, inventories to sales ratio and unemployment duration that tend to change after real output changes.

The study of economics concerned with the economy as a whole, involving aggregate demand, aggregate supply, and monetary and fiscal policy.

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.

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.

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

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

A process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want.

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

In a credit arrangement, the total amount spent during the billing cycle.

Two ways of expressing monetary values. Nominal monetary values are measured in current prices; real monetary values are measured in constant prices, that is, in prices of a given or base period. Real monetary values are obtained by adjusting nominal monetary values with an appropriate index of prices.

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).

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

An ownership share or shares of ownership in a corporation.

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 exchange of goods and services for money or other goods and services.

Money collected by the government from one group and given to others. Examples include Social Security benefits, unemployment insurance payments and agricultural subsidies.

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

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