Glossary Terms:

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

Any activity or organization that produces or exchanges goods or services for a profit.

A written order to a financial institution directing the financial institution to pay a stated amount of money, as instructed, from the customer's account.

Decision made or course of action taken when faced with a set of alternatives.

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.

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.

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

Trading a good or service for another good or service, or for money.

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.

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).

Accommodation in houses, apartments, etc.

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

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.

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

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.

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

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 number of people without jobs who are actively seeking work.

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.

Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs.

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.