Glossary Terms:

A spending-and-savings plan, based on estimated income and expenses for an individual or an organization, covering a specific time period.

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).

In the context of credit transactions, capacity 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 and future earnings relative to current debt. High earnings and low debt, for example, indicate a strong capacity to make payments on the loan in question.

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

A legal entity owned by shareholders whose liability for the firm's losses is limited to the value of the stock they own.

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.

A conclusion reached after considering alternatives and their results.

A sustained decrease in the average price level of all the goods and services produced in the economy.

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

A factor, often a monetary policy or disadvantage, that discourages people from doing something.

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

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

The process of improving the quality of human lives through raising living standards. Economic development is broader than economic growth, which is concerned with year-to-year increases in production. Economic development deals with the economic, social and political institutions that govern the way the economy and society function.

An increase in real output as measured by real GDP or per capita real GDP.

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

Economic units that demand productive resources from households and supply goods and services to households and government agencies.

Tangible objects that satisfy economic wants.

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).

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

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 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.

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

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

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

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).

Tax in the form of a percent of the cost of a good or service; paid to local and state governments when goods and services are purchased.

Disposable income (income after taxes) minus consumption spending.

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

An ownership share or shares of ownership in a corporation.

A market in which the public trades stock that someone already owns; the buying and selling of stock.

Compulsory payments to governments by households and businesses.

The giving up of one benefit or advantage in order to gain another regarded as more favorable.

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

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