1 Civics & Economics Top 100 What every student should know to pass the Civics & Economics Final Exam
2 Budget Budget: a written plan of the money that flows in and out of your household or pocket every month
3 Instant GratificationWhen people consider only short-term satisfaction The cost of the future debt outweighs the satisfaction of the present purchase. Ex. Credit Cards
4 Fixed vs. Variable Cost Fixed business costs that do not depend on the level of production and do not change from month to month. Variable cost: depend on a firm’s level of production and could possibly change from month to month
5 Savings and Compound InterestSavings is income not spent Compound interest is Interest earned added over time. The interest continues to increase because the amount earned increases.
6 Retirement Social Security: government retirement and disability program Mutual fund: that pools the savings of many individuals and invests it in a variety of investments and are a relatively low-risk investment. Pension: fund that collects and invests income until payments are made to eligible recipients
7 The World of Credit Credit: the promise to repay borrowed money (principal) with interest over a certain period of time. APR: describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc Principal: the amount that one owes Interest: compensation to the lender, for a risk of principal loss
8 Identity Theft and Credit ReportIdentity theft: The crime of obtaining the personal or financial information of another person for the sole purpose of assuming that person's name or identity in order to make transactions or purchases Credit report: a detailed report of an individual's credit worthiness prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness
9 Warranty and InsuranceWarranty: refers to the terms and situations in which repairs or replacements will be made in the event that the product does not function as originally described or intended Insurance: contract in which someone receives financial payment or reimbursement against losses
10 Medicare vs. Medicaid Medicare: government funded healthcare for the elderly or disabled Medicaid: government funded healthcare for people in poverty who qualify
11 BBB Better Business Bureau: aims to promote fair business practices, leading to an environment where buyers and sellers can operate under a common understanding of trust
12 Factors of Production Resources necessary to produce goods and services The four factors of production are natural resources, labor, capital, and entrepreneurs.
13 Natural Resources Gifts of nature that make production possible
14 Labor Human effort directed toward producing goods and services
15 Capital Previously manufactured goods used to make other goods and services
16 Entrepreneurs Individuals who start new businesses, introduce new products, and improve management techniques
17 Scarcity Not having enough resources to produce all of the goods and services we would like to have
18 Trade-offs The alternative you face if you decide to do one thing rather than another
19 Opportunity Costs The cost of the next best alternative use of time and money when choosing to do one thing rather than another
20 Law of Diminishing ReturnsThe tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of result has been achieved.
21 Productivity The degree to which resources are being used efficiently to produce goods and services
22 Specialization When people, businesses, regions and/or nations concentrate on goods and services that they can produce better than anyone else
23 Division of Labor The breaking down of a job into separate, smaller tasks to be performed individually
24 Needs Requirements for survival, such as food, clothing, and shelter
25 Wants Things we would like to have, such as entertainment, vacations, and items that make life comfortable and enjoyable
26 Cost-Benefit AnalysisEconomic model that compares the marginal costs and marginal benefits of a decision
27 Command Economy An economic system in which the major economic decisions are made by the central government
28 Market Economy An economic system in which individuals own the factors of production and make economic decisions through free interaction
29 Mixed Economy An economic system combining the characteristics of more than one type of economy
30 Traditional Economy An economic system in which the decisions of what, how, and for whom to produce are based on custom or habit
31 Economic Questions Economics is the study of how we make decisions in a world where resources are limited. WHAT to produce? HOW to produce? FOR WHOM to produce?
32 Free Enterprise SystemEconomic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
33 Circular Flow Model Circular flow shows us that input from each sector and to each sector spurs on production and thus goods and services are created.
34 Supply The amount of goods and services that producers are able and willing to sell at various prices during a specified time period Law of Supply – the principle that suppliers will normally offer more for sale at higher prices and less at lower prices
35 Demand The desire, willingness, and ability to buy a good or serviceLaw of Demand – the concept that people are normally willing to buy less of a product if the price is high and more of it if the price is low
36 Types of Income Wages – Payment for labor or services to a worker, especially remuneration on an hourly, daily, or weekly basis or by the piece. Salary – Fixed compensation for services, paid to a person on a regular basis.
37 Surplus Situation in which quantity supplied is greater than quantity demanded Situation in which government spends less than it collects in revenue
38 Shortage Situation in which quantity demanded is greater than quantity supplied
39 Competition The struggle that goes on between buyers and sellers to get the best products at the lowest prices
40 Types of Businesses Sole Proprietorship –a business owned and operated by a single person Partnership – a business owned by two or more people Corporation – type of business organization owned by many people but treated by law as though it were a person
41 Labor Unions Association of workers organized to improve wages and working conditions
42 Investments An asset or item that is purchased with the hope that it will generate income in the future. In an economic sense, an investment is the purchase of goods that are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will be sold at a higher price in the future.
43 Business Cycle Alternating periods of growth, and decline that the economy goes through
44 Economic Indicators Series of statistical figures, such as the consumer price index or the gross domestic product, used by economists to predict future economic activity.
45 Consumer Price Index An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period. Also called cost-of-living index. It measures inflation.
46 Gross Domestic Product (GDP)The total market value of all the goods and services produced within the borders of a nation during a specified period.
47 Government RegulationA regulation is a legal restriction promulgated by government administrative agencies through rulemaking supported by a threat of sanction or a fine. Common examples of regulation include attempts to control market entries, prices, wages, pollution effects, employment for certain people in certain industries, standards of production for certain goods and services.
48 Globalization Individuals and nations working across barriers of distance, culture, and technology
49 Downsizing To become smaller in size by reductions in personnelOutsourcing
50 Regional Economic IssuesNorth Carolina’s furniture and textile industries have been affected by globalization. Many factories in North Carolina have closed.
51 Tariffs A customs duty; a tax on an imported good
52 North American Free Trade Agreement (NAFTA)An agreement between the United States, Canada, and Mexico to establish free trade. It took effect in 1994 and is designed to eliminate trade barriers between the three nations by 2009.
53 World Trade Organization (WTO)An international organization based in Geneva that monitors and enforces rules governing global trade
54 European Union (EU) An economic and political union established in 1993 by members of the European Community. The establishment of the European Union expanded the political scope of the European Economic Community, especially in the area of foreign and security policy, and provided for the creation of a central European bank and the adoption of a common currency, the euro.
55 Federal Reserve SystemA U.S. banking system that consists of 12 federal reserve banks, with each one serving member banks in its own district. This system, supervised by the Federal Reserve Board, has broad regulatory powers over the money supply and the credit structure.
56 National Debt The debt of the government; the amount of borrowing by the government to meet expenditures exceeding tax revenues.
57 Inflation Sustained increase in the general level of prices
58 Civic ResponsibilitiesIt is comprised of actions and attitudes associated with democratic governance and social participation. Civic responsibility can include participation in government, church, volunteers and memberships of voluntary associations.
59 Discrimination Unfair treatment based on prejudice against a certain group
60 Freedom Freedom emphasizes the opportunity given for the exercise of one's rights, powers, desires, or the like: freedom of speech or conscience; freedom of movement.
61 Public Problems Under employment Education needs Graft and corruptionCitizen apathy Disease Poverty Substance abuse Discrimination Waste Disposal Homelessness Crime Pollution
62 Choices The power, right, or liberty to choose