Define capital (in economics).Goods used to create other goods in an economy.
What is a club good?A variant of a public good; a product or benefit provided such that its enjoyment is exclusively for those who paid for it, but for which one person's enjoyment of it does not inhibit the enjoyment of it by others.
What is a common good?A variant of a public good; a benefit provided to a group of people that each member can enjoy without necessarily having to pay for it, but such that one individual's consumption of it precludes others from consuming it.
What is deflation?When the purchasing value of a unit of currency, such as the dollar, increases, so goods and services are worth less of the currency.


What is distributive policy?A government policy intended to provide benefits to large portions of the population.
What are externalities?Effects on people, good or bad, arising from the economic behavior of others. Also known as spillover effects.
What is the Federal Reserve Board?Board of directors, consisting of seven members appointed by the president, in charge of policies for the Federal Reserve System.
What is the Federal Reserve System?Network of U.S. government banks that loan money to and regulate the commercial behavior of private banks.


What is fiscal policy?Taxing and spending decisions by the government.
What is the gross domestic product (GDP)?The value of all the goods and services produced by an economy within its borders.
What is inflation?When the purchasing value of a unit of currency, such as the dollar, declines so that goods and services cost more of the currency.
What is laissez-faire?An economic philosophy advocating that the government take a noninterventionist approach to the economy, leaving market forces alone to determine the economic behavior of people and business firms.


What is monetary policy?Government management of the supply of money in the economy, which affects prices, interest rates, and the availability of loans.
Define national debt.The total amount owed to those who have loaned money to the government.
What is the national deficit?The difference in a given year between what the government raises in taxes and fees and what the government spends.
What is a private good?A product or benefit provided such that its enjoyment can be limited to specific people, and such that one individual's consumption of it precludes others from consuming it.


What is a progressive tax?A tax that places a greater financial burden on the wealthy than on the poor and the middle class.
What is a public good?A benefit provided to a group of people such that each member can enjoy it without necessarily having to pay for it, and such that one person's enjoyment of it does not inhibit the enjoyment of it by others.
What is redistributive policy?A government benefit provided to some people that is paid for by another group of people.
What is a regressive tax?A tax that places a greater financial burden on the poor and middle class than on the wealthy.


What is the balance of trade?The difference between the value of a nation
What is a budget deficit?Government expenditures that exceed receipts.
What is the Consumer Price Index (CPI)?A measure of the change in price over time of a specific group of goods and services used by the average household.
What are exports?Goods and services produced domestically for sale abroad.


What is the Federal Open Market Committee?The most important body within the Federal Reserve System. The Federal Open Market Committee decides how monetary policy should be carried out.
What is full employment?An arbitrary level of unemployment that corresponds to ''normal'' friction in the labor market. In 1986, a 6.5 percent rate of unemployment was considered full employment. Today, it is assumed to be around 5 percent.
What is the Glass-Steagall Act?A law passed in 1933 to regulate the banking industry which prohibited banks from engaging in speculative investments or becoming investment houses.
What is gross public debt?The net public debt plus interagency borrowings within the government.


What is an import quota?A restriction imposed on the value or number of units of a particular good that can be brought into a country. Foreign suppliers are unable to sell more than the amount specified in the import quota.
What are imports?Goods and services produced outside a country but sold within its borders.
What is Keynesian economics?A school of economic thought that tends to favor active federal government policymaking to stabilize economy-wide fluctuations, usually by implementing discretionary fiscal policy.
What is a loophole?A legal method by which individuals and businesses are allowed to reduce the tax liabilities owed to the government.


What is loose monetary policy?Monetary policy that makes credit inexpensive and abundant, possibly leading to inflation.
What is a recession?Two or more successive quarters in which the economy shrinks instead of grows.
What are tariffs?Taxes on imports.
What is tight monetary policy?Monetary policy that makes credit expensive in an effort to slow the economy.


What is a U.S. Treasury bond?Debt issued by the federal government.
Define unemployment.The inability of those who are in the labor force to find a job; defined as the total number of those actively looking for a job but unable to find one.