Terms & Concepts

3. The effect of an increase in national income leading to a proportionally larger increase in capital investment.
7. A curve showing an inverse, historical relationship between rates of unemployment and rates of inflation.
9. A problem: A conflict in priorities between the owner and managers.
10. A slowdown in the rate of price inflation, meaning prices are still rising, just more slowly than before.
11. Economic statements that are subjective and based on value judgments
13. The effect where an initial injection of spending leads to a proportionally larger increase in final national income
15. The process where new innovations and technologies replace and dismantle established companies and outdated industries.
17. A curve showing the relationship between tax rates and the total amount of tax revenue collected by governments.
18. Policy taken by a central bank to control the money supply and interest rates to achieve macroeconomic goals.
19. Meaning "all other things being equal," used in economics to isolate the effect of one variable on another.

1. Demand for a good, service, or factor of production that arises from the demand for another related good or service.
2. Economic statements that are objective, fact-based, and can be tested or proven true or false.
4. An equivalence: A theory suggesting that consumers anticipate future taxes when the government borrows money.
5. Policy involving government spending and taxation to influence the economy.
6. The proportion of an additional dollar of disposable income that consumers spend on foreign goods and services.
7. An economic efficient state where resources cannot be reallocated to make one individual better off without making at least one individual worse off.
8. The theory that if everyone tries to save more money during a recession, total demand falls, worsening the economic situation.
12. The time and effort costs people incur trying to find the best prices, best interest rates, or best way to not hold cash during periods of high inflation
13. The costs businesses incur when having to change their prices.
14. A situation where increased government borrowing drives up interest rates, reducing private sector investment and spending.
16. The loss of economic efficiency or welfare.
20. The illegal price strategy of setting prices extremely low to drive competitors out of the market, with the intent to raise prices later.