Business Cycle (Economic Cycles) – The periodic rises and falls
that occur in all economies over time.
Capitalism – An economic system in which all or most of the
factors of production and distribution are privately owned and
operated for profit.
Communism – An economic and political system in which the
state (the government) makes all economic decisions and owns
almost all of the major factors of production.
Consumer Price Index (CPI) – Monthly statistic that measures
the pace of inflation or deflation.
Deflation – A situation in which prices are declining.
Demand – The quantity of products that people are willing to buy
at different prices at a specific time.
Depression – A severe recession.
Disinflation – A situation in which price increases are slowing
(the inflation rate is declining).
Economics – The study of how society chooses to employ
resources to produce goods and services and distribute them for
consumption among various competing groups and individuals.
Free-Market Economy – An economy in which the market
largely determines what goods and services are produced, who
gets them, and how the economy grows.
Inflation – A general rise in the prices of goods and services over
Invisible Hand – A phrase coined by Adam Smith to describe the
process that turns self-directed gain into social and economic
benefits for all.
Macroeconomics – The part of economic study that looks at the
operation of a nation’s economy as a whole.
Market Price – The price determined by supply and demand.
Microeconomics – The part of economic study that looks at the
behavior of people and organizations in particular markets.