Chapter 2 POB

3. a decrease in the general level of prices.
6. salaries and wages as well as investment income and government payments to individuals.
11. the total dollar value of all final goods and services produced in a country during one year.
13. in a corporation.
15. a movement of the economy from one condition to another and back again. It has four cycles, including prosperity, recession, depression, and recovery.
16. the total amount owed by the federal government.
17. the peak of the business cycle, it is a period in which most people who want to work are working, businesses produce goods and services in good numbers, wages are good, and the rate of gross domestic product growth increases.
20. a certificate representing a promise to pay a definite amount of money at a stated interest rate on a specified due date.

1. the portion of people in the labor force who are not working.
2. an increase in the general level of prices.
4. occurs when a government spends less than it takes in.
5. the phase of the business cycle that is marked by a prolonged period of high unemployment, weak consumer sales, and business failures.
7. occurs when a government spends more than it takes in
8. the sales of durable and nondurable goods bought by consumers.
9. the output per person, calculated by dividing gross domestic product by the total production.
10. the production output in relation to a unit of input, such as a worker.
12. a number that compares prices in one year with some earlier base year.
14. project spending by business for items such as land, buildings, equipment, and new products.
18. the welcome phase in the business cycle in which unemployment begins to decrease, demand for goods and services increases, and GDP begins to rise again.
19. the phase of the business cycle in which demand begins to decrease, businesses lower production, unemployment begins to rise, and GDP growth slows for two or more quarters of the calendar year.