balance of trade
The part of a nation's balance of payments regarding the import
and export of merchandise goods. If exports exceed imports, the
trade balance is in a surplus; if imports exceed exports, the trade
balance is in a deficit.
confidence in currency
When a medium of exchange is widely accepted, available and holds its
value over time.
credit availability
The value of funds available for loans. Readily available credit allows
entrepreneurs to invest in capital and innovations.
demographics
Characteristics of a population. Economists and sociologists use demographics
to study patterns of a group within a population that has similar traits.
For example, if country X has an increase in the number of women in
the labor force, more labor hours are available to produce goods and
services. This may boost country X's productive capacity and consequently
its GDP. Another example is income distribution. Some economists argue
that countries with a more equal income distribution tend to grow faster
than those with large disparities in income. When studying demographics,
it is important to consider whether demographics are a cause or result
of economic growth.
fiscal policy
Government policy regarding taxation and spending. Fiscal policy is
made by Congress and the Administration.
Gross Domestic Product (GDP)
Total value of goods and services produced in a country.
inflation
A rise, over time, in the average level of prices.
infrastructure
The physical base on which productive activity takes place. Infrastructure
includes schools, roads, energy plants, street lights and sewer systems.
intellectual property rights
The right of an individual or a group to patent, copyright or in some
other manner to claim ideas, creations, inventions or discoveries as
one's own. Such protection provides an environment for entrepreneurs
to safely market their products and services.
monetary policy
Federal Reserve actions to influence the availability and cost of money
and credit, as a means of helping to promote high employment, economic
growth, price stability and a sustainable pattern of international transactions.
Tools of monetary policy include open market operations, the discount
rate and reserve requirements.
price stability
An economy with relatively consistent values of goods and services from
year to year, all things being equal. When price levels are rapidly
fluctuating, businesses and consumers don't receive clear signals about
the buying power of the currency or the relative value of products available
to purchase.
property rights
Provide the rules of ownership and trade so consumers and businesses
know what they can and can't do in the marketplace.
regulation
The limitations and guidelines that governments place on industry and
individuals.
savings and consumption rates
The amount of an individual's income that one saves vs. the amount that
one spends on goods and services.
taxes
The means by which governments raise revenue. Different methods of taxation
affect the market in varying degrees. For example, a progressive income
tax has a different effect on the economy than a gas or capital gains
tax.
trade policy
Indicates a country's level of freedom in trading with other countries.
Tariffs may be added to goods and services to collect government revenue
or to encourage purchases of one product over another (typically a domestically
produced one over an imported one).