Economics Chapter 2 Vocab
Capital
Tools, instruments, machines, buildings, and other items that have been produced in the past and that businesses now use to produce goods and services.
Wages
income paid for the services of labor
Circular Flow Model
A model of the economy that shows the circular flow of expenditures and incomes, that result from decision makers' choices and the ways those choices interact to determine what, how, and for whom goods and services are produced
Market
Any arrangements that brings buyers and sellers together and enables them to get information and do business with each other
Government Goods and Services
Goods and services that are bought by governments
Consumption Goods and Services
Goods and services that are bought by individuals and used to provide personal enjoyment and contribute to person's quality of life
Export goods and services
Goods and services that are produced in one country and sold in other countries
Capital Goods
Goods that are bought by businesses to increase their productive resources
Profit (or loss)
Income earned by an entrepreneur for running a business
Interest
Income paid for the use of capital
Rent
Income paid for the use of land
Households
Individuals or groups of people living together
Goods Markets
Markets in which goods and services are bought and sold
Factor Markets
Markets in which the services of factors of production are bought and sold
Land
The "gifts of nature," or natural resources, that we use to produce goods and services
Personal Distribution of Income
The distribution of income among households
Functional distribution of Income
The distribution of income among the factors of production
Exports
The goods and services that firms in one country sell to households and firms in other countries
Imports
The goods and services that households and firms in one country buy from firms in other countries
Enterperneurship
The human resources that organizes labor, land, and capital to produce goods and services
Firms
The institutions that organize the production of goods and services
Human Capital
The knowledge and skill that people obtain from education, on-the-job training, and work experience
Factors of Production
The productive resources that are used to produce goods and services-land, labor, capital, and enterprenurship
National Debt
The total amount that the federal government has borrowed to make expenditures that exceed tax revenue-to run a government budget deficit
Labor
The work time and work effort that people devote to producing, goods and services