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).

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.

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

The percentage of the total population aged 16 or over that is employed.

Unemployment caused by the short-term movement of people between jobs and by first-time job seekers entering the labor force; always present in a dynamic economy.

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.

Funds raised through taxing and borrowing to pay for government expenditures.

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

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

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.

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.

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.

The fee paid for insurance protection.

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

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

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).

Earnings from an investment, usually expressed as an annual percentage.

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.

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

The type of unemployment resulting from people's present abilities, skills, training and location not matching up with available job openings that reflect the basic structure of the economy.

Compulsory payments to governments by households and businesses.

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

Their are varying types and degrees of unemployment. Cyclical unemployment occurs with downturns in the economy and evaporates when the economy rebounds. Frictional unemployment details people who are unemployed while transitioning between jobs. Structural unemployment deals with an offset of skilled workers and available jobs. Seasonal unemployment is another situation in which skilled workers are mismatched with the number of jobs. Hidden unemployment the unemployment of potential workers, which is not reflected in official statistics. Hardcore unemployment describes persons who may be unemployable due to physical or mental incapacitation.

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

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

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

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.