Civics & Economics Top 100

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 Gratification • When 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 changefrom month to month

5. Savings and Compound Interest • Savingsis 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 Report • Identity 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 Insurance • Warranty: 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 Returns • The 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 Analysis • Economic 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 System • Economic 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 service • Law 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 Regulation • A 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 personnel • Outsourcing

50. Regional Economic Issues • North Carolina’s furniture and textile industries have been affected by globalization. Many factories in North Carolina have closed.