Key Terms

• Macroeconomics: The study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices.
• microeconomics: That field that deals with the small-scale activities such as that of the individual or company.
• aggregate demand: The total demand for final goods and services in the economy at a given time and price level.
• investment: A placement of capital in expectation of deriving income or profit from its use.
• entrepreneurship: The art or science of innovation and risk-taking for profit in business.
• saving: the act of storing for future use
• expansion: The act or process of expanding.
• trough: The lowest turning point of a business cycle
• peak: The highest value reached by some quantity in a time period.
• contraction: A period of economic decline or negative growth.
• recession: A period of reduced economic activity
• fiscal policy: Government policy that attempts to influence the direction of the economy through changes in government spending or taxes.
• monetary policy: The process by which the central bank, or monetary authority manages the supply of money, or trading in foreign exchange markets.
• economic growth: The increase of the economic output of a country.

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