Chapter 1 Understanding Evolving Economics
Bank of Canada
Canada's central bank, which has as its objective to "promote the economic and financial well-being of Canada"
recession
a decline in GDP that lasts for at least two consecutive quarters
supply curve
a graph showing the quantity of a good or service that a business will make available at various price.
demand curve
a graph showing the quantity of a good or service that people are willing to buy at various prices
oligopoly
a market structure in which a few firms produce most or all of the output and in which large capital requirements or other factors limit the number of firms
perfect (pure) competition
a market structure in which a large number of small firms sell similiar products, buyers and sellers have good information, and business can be easily opened or closed
pure monopoly
a market structure in which a single firm accounts for all
monopolistic competition
a market structure in which many firms offer products taht are close substitutes and in which entry is relatively easy
mixed economies
economies that combine several economic systems; for example, an economy in which the government owns certain industries but the private sector owns others.
entrepreneurs
people who combine the inputs of natural resources, labour, and capital to produce goods or services with the intention of making a profit or accomplishing a not- for0 profit goal.
bonds
securities that represent long-term debt obligations(liabilities) issued by corporations and governments
frictional unemployment
short-term unemployment that is not related to the business cycle
national debt
the accumulated total of all of the federal governments annual budget deficits
economic system
the combination of policies, laws and choices made by a nation's government to establish the systems that determine what goods and services are produced and how they are allocated
knowledge
the combined talents and skills of the workforce
federal budget defict
the condition that occurs when the federal government spends more for programs than it collects in taxes
full employment
the condition when all people who want to work and can work have jobs
fiscal policy
the governments use of taxation and spending to affect the economy
capital
the inputs, such as tools, machinery, equipment, and buildings, used to produce goods and services and get them to the customer
monetary policy
the measures taken by the Bank of Canada to regulate the amount of money in circulation in order to influence the economy
circular flow
the movement of inputs and outputs among households, businesses, and governments; a way of showing how the sectors of the economy interact
market structure
the number of suppliers in a market
unemployment
the percentage of the total labour force that is actively looking for work but is not actually working
equilibrium
the point at which quantity demanded equals quantity supplied
supply
the quantity of a good or service the businesses will make a available at various prices
demand
the quantiy of a good or service that people are willing to buy at various prices
factors of production
the resources used to create goods and services, including natural resources, labour, capital, entrepreneurship and knowledge
inflation
the situation in which the average of all prices of goods and services is rising
crowding out
the situation that occurs when government spending replaces spending by the private sector
economics
the study of how a society uses scarce resources to produce and distribute goods and services
Micro economics
the sub-area of economics that focuses on individual parts of the economy such as households or firms.
Macro economics
the sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products
gross national product GNP
the total market value of all final goods and services produced by a country regardless of where the factors of production are located
gross domestic product GDP
the total market value of all final goods and services produced within a nation's borders in a year
expansionary policy
the use of monetary policy by the Bank of Canada to increase the growth of the money supply
contractionary policy
the use of monetary policy by the Bank of Canada to tighten the money supply by selling government securites or raising interest rates
purchasing power
the value of what money can buy
structural unemployment
unemployment that is caused by a mismatch between available jobs and the skills of available workers in an industry ir region; it is not related to the business cycle
seasonal unemployment
unemployment that occurs during specific seasons in certain industries
cyclical unemployment
unemployment that occurs when a downturn in the business cycle reduces the demand for labour throughout the economy
business cycles
upward and downward changes in the level of economic activity
natural resources
Commodities that are useful inputs in their natural state
market economy
an economic system based on competition in the marketplace and private ownership of the factors of production (resources) ; also known as the pricate enterprise system or capitalsim
command economy
an economic system in which the basic industries are owned either by the government or by the private sector under strong government control
socialism
an economic system in which the basic industries are owned either by the private sector under strong government control.
economic growth
an increase in a nation's ouput of goods and services
consumer price index CPI
an index of the prices of a "shopping basket" of goods and services purchased by consumers
producer price index
an index of the prices paid by producers and wholesalersfor various commodities such as raw materials, partially finished goods, and finished products
labour
economic contributions of people
cost-push inflation
inflation that occurs when increases in production costs push up the prices of final goods and services
demand- pull inflation
inflation that occurs when the demand for goods and services is greater than the supply
