Enhance Your Learning with Market Economy Flash Cards for quick learning
An economic system in which the production and distribution of goods and services are determined by the interactions of supply and demand in the marketplace.
The fundamental forces that drive a market economy. Supply refers to the quantity of a good or service that producers are willing to sell, while demand refers to the quantity that consumers are willing to buy.
The rivalry among producers and sellers in a market, which leads to better products, lower prices, and innovation.
The point at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in a stable price and quantity in the market.
The process by which prices adjust to balance supply and demand in a market economy. Prices act as signals to producers and consumers, guiding their decisions.
The government plays a role in ensuring fair competition, protecting property rights, enforcing contracts, and providing public goods and services.
Instances where the market fails to allocate resources efficiently, such as externalities, public goods, and market power.
The exchange of goods and services between countries, allowing for specialization, increased variety, and economic growth.
The increase in the production and consumption of goods and services over time, leading to improved living standards and well-being.
The way in which income is divided among individuals or households in a society, influenced by factors such as education, skills, and government policies.
The total quantity of a good or service that all consumers in a market are willing and able to buy at a given price.
The total quantity of a good or service that all producers in a market are willing and able to sell at a given price.
The inverse relationship between the price of a good and the quantity demanded, assuming other factors remain constant.
The direct relationship between the price of a good and the quantity supplied, assuming other factors remain constant.
A measure of how responsive the quantity demanded of a good is to changes in its price.
A measure of how responsive the quantity supplied of a good is to changes in its price.
A situation where the quantity supplied exceeds the quantity demanded at a given price, resulting in downward pressure on prices.
A situation where the quantity demanded exceeds the quantity supplied at a given price, resulting in upward pressure on prices.
A market structure characterized by a large number of buyers and sellers, homogeneous products, perfect information, and free entry and exit.
A market structure characterized by a single seller with significant market power, leading to limited competition and the ability to set prices.
A market structure characterized by a few large firms dominating the market, leading to limited competition and the potential for collusion.
A market structure characterized by many sellers offering differentiated products, allowing for some degree of market power.
A government-imposed maximum price that can be charged for a good or service, often aimed at protecting consumers.
A government-imposed minimum price that must be paid for a good or service, often aimed at protecting producers.
A cost or benefit that affects a party who did not choose to incur that cost or benefit, resulting in market inefficiencies.
Goods or services that are non-excludable and non-rivalrous, meaning they are available to all and consumption by one does not reduce availability to others.
The ability of a firm or group of firms to influence the price or quantity in a market, often due to barriers to entry or control over key resources.
The ability of a country, individual, or firm to produce a good or service at a lower opportunity cost than others, leading to specialization and trade.
The use of trade barriers, such as tariffs and quotas, to protect domestic industries from foreign competition.
The total value of all final goods and services produced within a country's borders in a given period of time, often used as a measure of economic growth.
A sustained increase in the general price level of goods and services in an economy over time, reducing the purchasing power of money.
The state of being without a job, often measured as a percentage of the labor force.
The state of being extremely poor, often measured by income levels below a certain threshold.
A tax system in which the tax rate increases as the taxable income increases, resulting in higher tax burdens for higher-income individuals.
A tax system in which the tax rate decreases as the taxable income increases, resulting in higher tax burdens for lower-income individuals.
A tax system in which the tax rate remains constant regardless of the taxable income, resulting in a consistent tax burden for all individuals.
The use of government spending and taxation to influence the economy, often aimed at stabilizing economic growth and controlling inflation.
The use of central bank tools, such as interest rates and money supply, to control inflation, stabilize prices, and promote economic growth.
A situation where a country's imports exceed its exports, resulting in a negative balance of trade.
A situation where a country's exports exceed its imports, resulting in a positive balance of trade.
The market where currencies are bought and sold, allowing for international trade and investment.
The price of one currency in terms of another, determining the value of goods and services in international trade.
The process of improving the economic well-being and quality of life for a country's population, often measured by indicators such as GDP per capita and human development index.
The unequal distribution of income among individuals or households in a society, often measured by indicators such as the Gini coefficient.
The ability of individuals or households to move up or down the social and economic ladder over time, often influenced by factors such as education, skills, and opportunities.
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, balancing economic, social, and environmental considerations.
The increasing interconnectedness and interdependence of countries through the exchange of goods, services, information, and ideas, leading to greater economic integration and cultural exchange.
The policy of allowing goods and services to be traded without restrictions or barriers, promoting economic efficiency and specialization.
The process of eliminating trade barriers and harmonizing economic policies among countries, leading to increased trade and economic cooperation.
The investment of foreign assets into domestic structures, equipment, and organizations, promoting economic growth and development.
A company that operates in multiple countries, often with production facilities, sales, and distribution networks in different regions of the world.
A record of all economic transactions between the residents of a country and the rest of the world, including trade in goods and services, financial flows, and transfers.
Assets held by a central bank in foreign currencies, used to stabilize the domestic currency, intervene in the foreign exchange market, and ensure liquidity in international transactions.
A significant decline in economic activity, often characterized by a contraction in GDP, high unemployment, and reduced consumer spending.
A severe and prolonged economic downturn, characterized by a deep contraction in economic activity, high unemployment, and widespread business failures.