Business

Represents ownership in a corporation.

Stock

The portion of people in the labor force who are not working.

Unemployment Rate

The movement of an economy from one condition to another and back again.

Business Cycle

Represents debt for an organization.

Bond

Government spends more than it takes in.

Budget Deficit

Government spends less than it takes in.

Budget Surplus

A phase marked by a long period of high unemployment, weak consumer sales, and business failures.

Depression

Spending by businesses for items such as land, buildings, and equipment.

Capital Product

A decrease in the general price level.

Deflation

The total value of all final goods and services produced in a country in one year.

GDP

The GDP divided by the total population of a country.

GDP Per Capita

"GDP is the best measurement of a country economy." Explain why you agree or disagree with this statement.

GDP may not be entirely accurate in reflecting the economic standing of a country. GDP per capita is a more accurate measure of the production of a country, and "real" GDP will allow for variations in prices. Other economic activities might indicate a healthy economy for developing countries such as new businesses, technology, and rising literacy rates.

Name three factors that can contribute to increased output of goods and services in a country. Explain how these factors can improve productivity.

Improvements in capital resources (equipment and technology), worker training, and management techniques can each result in more output per worker.

What is the effect of increased productivity over a countries leisure time? How might increased productivity affect career opportunities?

Increased productivity means that workers are able to work fewer hours to produce the same amount or more products, leaving leisure time. Increased demand for skilled workers, including those hired for production, as well as marketing and management personnel.

An increase in the general price level.

Inflation

The total amount owned by the federal government.

National Debt

The GDP of country A is $400,000. The GDP of country B is $800,000. Does this mean that the per capita output of country B is about twice that of country A? Explain.

No, not unless country B had the same population as country A, which would be unlikely. GDP per capita is determined by dividing GDP by the total population. In the example, if country B had twice the population of country A, the per capita output would be about the same in both countries. In order for country B to have twice the per capita output of country A, the population would have to be the same in both countries.

The sales of durable and nondurable goods bought by consumers.

Retail Sales

Salaries and wages as well as investment income and government payments to individuals.

Personal Income

A number that compares prices in one year with prices in some earlier base year.

Price Index

Production output in relation to a unit of input, such as a worker.

Productivity

A period in which unemployment is low, businesses produce many goods and services, and wages are good.

Prosperity

A period in which demand, production, and GDP growth decrease and unemployment begins to rise.

Recession

The phase in which unemployment decreases, demand for goods and services increases, and GDP begins to rise.

Recovery

Suppose that many auto and steel plants close in a country. Thousands of workers lose their jobs in a short period. If the country has been enjoying prosperous times, it may now be headed into what phase of the business cycle? Describe other conditions that might begin to occur.

The country might be headed into a recession. If so, the auto and steel workers who have lost their jobs will reduce their demand for other goods and services, causing other businesses to lose business and perhaps lay off more workers. This lowered demand, lowered production, and increasing unemployment might spread throughout the economy.