Reading Essentials and Study Guide - Student Edition

1 ECONOMICS:PRINCIPLESANDPRACTICESR eading EssentialsandStudy GuideStudent WorkbookTO THE STUDENTThe Reading Essentials and Study Guideis designed to help you use recognized readingstrategies to improve your Reading -for-information skills. For each section of the Student text-book, you are alerted to key terms, asked to draw from prior knowledge, organize thoughts witha graphic organizer, and then follow a process to read and understand the text. The ReadingEssentials and Study Guidewas prepared to help you get more from your textbook byreading with by The McGraw-Hill Companies, Inc.

2 All rights reserved. Permission is granted to reproducethe material contained herein on the condition that such material be reproduced only for classroom use; be provided to students , teachers, and families without charge; and be used solely in conjunction withEconomics: Principles and Practices. Any other reproduction, for use or sale, is prohibited without written permission from the all inquiries to:Glencoe/McGraw-Hill8787 Orion PlaceColumbus, OH 43240 ISBN 0-07-865040-2 Printed in the United States of 2 3 4 5 6 7 8 9 10 047 09 08 07 06 05 04 CONTENTSC hapter 1 What Is Economics?

3 1 Scarcity and the Science of Economics.. 12 Basic Economic Concepts.. 43 Economic Choices and Decision Making.. 7 Chapter 2 Economic Systems and Decision Making1 Economic Systems .. 102 Evaluating Economic Performance .. 133 Capitalism and Economic Freedom .. 15 Chapter 3 Business Organizations1 Forms of Business Organization.. 182 Business Growth and Expansion.. 223 Other Organizations.. 25 Chapter 4 Demand1 What Is Demand?.. 282 Factors Affecting Demand.. 313 Elasticity of Demand.. 34 Chapter 5 Supply1 What Is Supply?

4 372 The Theory of Production.. 403 Cost, Revenue, and Profit Maximization.. 43 Chapter 6 Prices and Decision Making1 Prices as Signals.. 462 The Price System at Work.. 493 Social Goals vs. Market Efficiency.. 52 Chapter 7 Market Structures1 Competition and Market Structures.. 552 Market Failures.. 593 The Role of Government.. 62 Chapter 8 Employment, Labor, and Wages1 The Labor Movement.. 642 Resolving Union and Management Differences.. 673 Labor and Wages.. 704 Employment Trends and Issues.. 73 Chapter 9 Sources of Government Revenue1 The Economics of Taxation.

5 762 The Federal Tax System.. 803 State and Local Tax Systems.. 834 Current Tax Issues.. 86 Chapter 10 Government Spending1 The Economics of Government Spending.. 902 Federal Government Expenditures.. 933 State and Local Government Expenditures.. 964 Deficits, Surpluses, and the National Debt.. 98 Chapter 11 Money and Banking1 The Evolution of Money.. 1012 Early Banking and Monetary Standards.. 1043 The Development of Modern Banking.. 108 Chapter 12 Financial Markets1 Savings and the Financial System.. 1122 Investment Strategies and Financial Assets.

6 1153 Investing in Equities, Futures, and Options.. 119 Chapter 13 Economic Performance1 Measuring the Nation s Output.. 1232 GDP and Changes in the Price Level.. 1273 GDP and Population.. 1304 Economic Growth.. 133 Chapter 14 Economic Instability1 Business Cycles and Fluctuations.. 1362 Unemployment.. 1403 Inflation.. 1424 Poverty and the Distribution of Income.. 145 Chapter 15 The Fed and Monetary Policy1 The Federal Reserve System.. 1492 Monetary Policy.. 1523 Monetary Policy, Banking, and the Economy.. 156 Chapter 16 Achieving Economic Stability1 The Cost of Economic Instability.

7 1592 Macroeconomic Equilibrium.. 1613 Stabilization Policies.. 1634 Economics and Politics.. 166 Chapter 17 International Trade1 Absolute and Comparative Advantage.. 1692 Barriers to International Trade.. 1723 Financing and Trade Deficits.. 176 Chapter 18 Comparative Economic Systems1 The Spectrum of Economic Systems.. 1792 The Rise and Fall of Communism.. 1833 The Transition to Capitalism.. 1874 The Various Faces of Capitalism.. 190 Chapter 19 Developing Countries1 Economic Development.. 1932 A Framework for Development.. 1963 Financing Economic Development.

8 199 Chapter 20 Global Economic Challenges1 The Global Demand for Resources.. 2032 Economic Incentives and Resources.. 2063 Applying the Economic Way of Thinking.. 209 Copyright by The McGraw-Hill Companies, Guide1 Name Date Class KEY TERMSFor use with textbook pages 5 101,1 Name Date Class scarcityThe condition that results from society not having enough resources to produce all the things people would like to have (page 5)economicsThe Study of how people try to satisfy what appears to be seemingly unlimited and competingwants through the careful use of relatively scarce resources (page 6)needA basic requirement for survival that includes food, clothing, and shelter (page 6)

9 WantA way of expressing a need (page 6)factors of productionResources required to produce things people would like to have; they include land,capital, labor, and entrepreneurs (page 7)landNatural resources not created by humans (page 7)capitalThe tools, equipment, machinery, and factories used in the production of goods and services(page 7)financial capitalThe money used to buy the tools and equipment used in production (page 7)laborPeople with all their efforts, abilities, and skills (page 8)entrepreneurA risk-taker in search of profits who does something new with existing resources (page 8)productionThe process of creating goods and services (page 8)

10 Gross Domestic Product (GDP)The dollar value of all final goods, services, and structures produced within a country s borders in a 12-month period (page 9)KEY TERMSSCARCITY AND THE SCIENCE OF ECONOMICSDRAWING FROM EXPERIENCEHave you ever wanted more than you had? What did you do to get what you wanted? Wheredid you go to get it?This section focuses on basic economic concepts such as people s needs and wants and how theeconomy produces goods and services to satisfy YOUR THOUGHTSUse the table below to help you take notes as you read the summaries that follow.