Unit 2 Vocabulary by Victoria Elliott

Standard of Living

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the necessities, comforts, and luxuries enjoyed or aspired to by an individual or group.

Gross Domestic Product (GDP)

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the gross national product excluding the value of net income earned abroad

Inflation

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: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services

Consumer Price index (CPI)

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an index measuring the change in the cost of typical wage-earner purchases of goods and services expressed as a percentage of the cost of these same goods and services in some base period

Expansion Period

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A phase in the business cycle where economic activity is growing, marked by rising GDP, employment, and production.

Peak Period

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The point in the business cycle where economic growth reaches its highest point before starting to contract.

Contraction Period

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A phase in the business cycle where economic activity declines, marked by decreasing GDP, employment, and production.

Trough

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The lowest point in the business cycle, occurring after a contraction, where the economy bottoms out before starting to recover.

Block Grant

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A fixed sum of money given by the federal government to states for broad purposes, allowing states more discretion on how to use it.

Currency Appreciation

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An increase in the value of one currency in relation to another, making foreign goods cheaper and exports more expensive.

Economy

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the structure or conditions of economic life in a country, area, or period : an economic system

Fiscal Policy

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The use of government spending and taxation to influence the economy, typically to promote growth, reduce unemployment, and control inflation.

Agency Cost

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The costs that arise from conflicts of interest between shareholders and management in a business, often seen when managers don't act in the best interests of the owners.

Aggregate Demand

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The total demand for goods and services in an economy at a given overall price level and in a given period.

Appropriation Act

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A legislative act that authorizes government expenditures for specific purposes, providing the legal basis for spending public funds.

Monarchy

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A form of government in which a single person, the monarch, rules. Monarchs often inherit their position and rule for life or until abdication.

Renewable Resource

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A natural resource that can replenish itself over time through natural processes, like solar energy, wind, and timber.

Nonrenewable Resource

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A natural resource that cannot be replaced once it’s consumed, such as oil, coal, and natural gas.

Exports

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Goods or services produced in one country and sold to another.

Imports

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Goods or services brought into one country from another for sale.

Tariffs

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Taxes imposed on imported goods, typically used to protect domestic industries or to generate revenue.

Free Trade

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International trade left to its natural course without tariffs, quotas, or other restrictions.

Interdependence

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The mutual reliance between two or more groups, especially in economic contexts, where countries depend on one another for goods, services, and resources.