DSSEP Home Page Economics Benchmark Terms and Definitions
Grades 9-12 Cluster

Economics 1


Choice: A choice is what an individual must make when faced with two or
more alternative uses of a resource.

Market Economy: A market economy is an economic system in which supply,
demand, and the price system help people make decisions and allocate

Production: Production is the means of creating goods and services
using productive resources (natural, capital, human, and
entrepreneurship). This can range from a single craftsperson producing a
good from beginning to end to mass production and the assembly line.

Distribution: Distribution is the way in which a nation's resources,
goods and services are allocated.

Goods: Goods are objects that can satisfy people's wants.

Services: Services are actions that can satisfy people's wants



Economics 2


Inflation: Inflation is an increase in most prices; deflation is a
decrease in most prices.

Unemployment: Unemployment exists when people who are actively looking
for work do not have jobs.

Business Cycle: The business cycle is systematic changes in real GDP
marked by alternating periods of expansion and contraction.

Monetary Policy: Monetary policy consists of actions initiated by a
nation's central bank that affect the amount of money available in the
economy and its cost (interest rates).

Fiscal Policy: Fiscal Policy is the use of government spending and
revenue collection measures to influence the economy.



Economics 3

Economic Systems

Transition: Transition is a period of change in which an economy moves
away from a centrally planned economy toward a market-based system.

Command Economy: A command economy is an economic system characterized
by a central authority that makes most of the major economic decisions.

Economics 4

International Trade

Flow of Investment: the direction and amounts of financial capital that
moves across national boundaries for the purpose of increasing economic

Patterns of International trade: the manner in which nations trade
based on location, types of goods and services, and government policies
which cause the costs and benefits of trading to develop

Political Stability: the ability of governments to establish and
maintain continuity over time without many changes to how they perform
the functions necessary to governing


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