Glossary Terms:

One of many choices or courses of action that might be taken in a given situation.

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.

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.

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

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.

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.

Unemployed people who have given up looking for work and are therefore not counted as part of the labor force.

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

The taxing and spending plan of the national government.

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.

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

Tangible objects that satisfy economic wants.

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 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.

The price paid for using someone else's money, expressed as a percentage of the amount borrowed.

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

Changes in the supply of money and the availability of credit initiated by a nation's central bank to promote price stability, full employment and reasonable rates of economic growth.

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.

The absence of inflation or deflation; a broad social goal and criterion for measuring the performance of an economic system.

People and firms that use resources to make goods and services.

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

Natural resources, human resources, capital resources and entrepreneurship used to make goods and services.

Goods, often supplied by the government, for which use by one person does not reduce the quantity of the good available for others to use, and for which consumption cannot be limited to those who pay for the good.

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

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

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

Use money now to buy goods and services.

The level of subsistence of a nation, social class or individual with reference to the adequacy of necessities and comforts of daily life.

Improvements in a firm's ability to produce due to improved processes, methods and machines.

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

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

An abstract measure of the satisfaction consumers derive from consuming goods and services.

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

People employed to do work, producing goods and services.