APPROPRIATION
The
law passed by Congress that funds (provides money) to government agencies to
carry out their programs.
AUTHORIZATION
The
law passed by Congress that states the maximum amount of money Congress may
appropriate for government programs.
AUTOMATIC STABILIZER
Program
that automatically provides benefits to offset a change in people's incomes
BALANCED BUDGET
A
budget in which the money going out is equal to or less than the money taken
in.
BANK
A
business that keeps money for customers, makes loans, and provides other
money-related services.
BANK PANIC
A
situation in which many banks fail because they are not able to meet the
demands of their depositors for cash.
BANKRUPT
Unable
to pay debts.
BOND
A
certificate of a loan to a government or a business (A person who buys a bond
is lending money to the government or corporation that sells the bond.)
BUDGET
A
plan of how much money a person, business, government, or organization is able
to spend and how it will be spent.
BUDGET
DEFICIT
A
financial situation in which spending is greater than income or revenues.
BUDGET RESOLUTION
An
agreement in Congress that shows total spending and revenues for a fiscal year
and how much will be spent in various categories.
BUDGET
SURPLUS
A
financial situation in which spending is less than income or revenues.
BUSINESS
CYCLE
Alternating
time periods of expanding and contracting economic activity.
CAPITAL
Human-made
items, such as machines and tools, that are used to produce goods and services.
CAPITALISM
An
economic system in which individuals, not the government control the production
and distribution of goods and services; also called market system.
CENTRAL
BANK
A
bank whose functions include controlling the nation's money supply; an institution
that lends money to other banks and the place where the government does its
banking business (Federal Reserve System in U.S.).
CASH
Bills
and coins.
CIRCULATION
Money
that is available for use.
CLEARINGHOUSE
A
place where banks exchange checks and settle accounts.
COIN
An
economic system in which the government controls the production and
distribution of goods and services.
COMMAND
SYSTEM
A
bank that provides checking accounts and savings accounts, and makes loans for
a variety of purposes.
COMMERCIAL
BANK
A
country's ability to produce a product at a lower opportunity cost than other
countries.
COMPARATIVE
ADVANTAGE
A
situation in which producers or sellers of similar goods or service each try to
get consumers to buy their products or use their services.
COMPETITION
A
situation in which producers or sellers of similar goods or service each try to
get consumers to buy their products or use their services.
COMPOUND
INTEREST
Interest
earned on the deposit and on all previously earned interest.
CONSUMER
Someone
who buys and uses goods and services.
CONTACTION
A
time period when GDP (amount of business) is decreasing.
COST-PUSH
INFLATION
The
kind of inflation caused by the rising cost of resources such as labor or oil.
COUNTERFEIT
To
make a copy of something that people will think is genuine.
CREDIT
Money
loaned, usually for a fee, that must be paid back.
CREDIT
UNION
A
kind of bank that is owned by members who belong to a certain company or group;
usually a not-for-profit organization.
CURRENCY
Any
kind of money that is used as a medium of exchange.
DEBT
Money
owed when you or a government buy something or credit or borrow money.
DEFICIT
Situation
in which government spends more than it collects in revenue.
DEFLATION
A
decrease in the average price of all goods and services.
DEMAND-PULL
INFLATION
The
kind of inflation caused when consumer spending is greater than the amount of
goods and services available.
DENOMINATION
Paper
money of a particular value.
DEPOSIT
Money
put into a bank.
DEPRESSION
A
period of serious recession marked by high unemployment and a decline in business.
DISCOUNT
RATE
The
rate of interest charged by the Federal Reserve Bank to borrowing banks.
DISCRETIONARY
SPENDING
Spending
for federal programs that must receive annual approval (appropriations) by
Congress.
DOLLAR
The
official unit of currency in the United States; based on the decimal system.
ECONOMIC
CHOICES
Every
society must decide WHAT to produce, HOW to produce, and FOR WHOM to produce.
ECONOMICS
The
study of how people, businesses, and governments choose to use their limited
(scarce) resources.
ECONOMIC
SYSTEM
The
way that a country or culture produces and distributes goods and services
ECONOMIST
A
person who studies the economy.
ECONOMY
The
way in which human resources and natural resources are used to produce goods
and services.
EMBRAGO
A
government policy that cuts off trade with certain countries.
EMPLOYEE
A
person who works for another in return for pay.
EMPLOYER
A
person or company for whom other people work for pay.
ENTITLEMENT
PROGRAM
A
program using eligibility requirements to provide health, nutritional, or income
supplements to individuals.
EXCHANGE
RATE
The
value of one nation's currency in comparison to another.
EXCISE
TAX
A
tax on certain items such as alcohol, tobacco, and gasoline.
EXPANSION
A
period of time during which the amount of business (GDP) increases.
EXPORT-
(NOUN)
A
good that is sent from one country to another; (verb)to send goods from one
country to another.
FEDERAL
DEPOSIT INSURANCE CORPORATION (FDIC)
A
government corporation that insures bank deposits up to $100,000.
FEDERAL
OPEN MARKET COMMITTEE (FOMC)
The
most powerful committee of the Fed, because it makes the decisions that affect
the economy as a whole by manipulating the money supply.
FINANCIAL
CAPITAL
Money
used to buy the tools and equipment used in production.
FINANCIAL
INSTITUTION
A
bank, credit union, savings and loan, or other organization that offers
services related to saving and borrowing money.
GOODS
Real
items or things, such as cars, watches, and clothing.
GOVERNMENT
REVENUE
Tax
dollars received by the government.
GROSS
DOMESTIC PRODUCT (GDP)
The
total dollar value of the final goods and services produced in a country each
year.
IMPORT-
(NOUN)
A
good that is brought into one country from another; (verb) to bring goods into
one country from another.
INCENTIVE
Something
that encourages people to work harder or to produce more.
INCOME
The
money a person gets from salary or wages, profits, interest, investments, and
other sources.
INFLATION
An
economic condition characterized by rising prices (increase in the average price
of all goods and services).
INTEREST
The
money a person pays to borrow money, or the money a bank pays depositors for
using their money.
