excise tax:A sales tax that is levied only on the sale of specific items.exclusion principal:The idea that one person can keep others from benefiting from a private good.expansion:The period of time where GDP is growing at a steady pace.expansionary fiscal policy:Governmental policies that cause the economy to grow by increasing aggregate demand;
lowering taxes and/or increasing spending help accomplish this.expansionary monetary policy:Money supply policy with the intention of increasing the money supply to help the
economy.expenditure:The monetary amount used to buy goods and services over a period of time.explicit costs:Monetary payments made to resources owners with the goal of operating a business.exports:Money spent by the foreign sector on domestic goods and services in a given year.external debt:The part of national debt that is owed to people or governments outside the Untied States.externalities:Costs or benefits passed on outside the market transaction.F
factor market:A market in which firms send monetary payments to households for a physical flow of land, labor,
capital, and entrepreneurship.factor of production:Any input or resource used to make goods and services (land, labor, capital, and entrepreneurial
ability).fallacy of composition:An incorrect belief or assumption that what is good for the individual is good for the group.Federal Deposit Insurance Corporation (FDIC):The agency that insures bank deposits of individuals and businesses
for up to $100,000 in the event of bank failure.federal funds rate:The interest rate banks pay to borrow from each other on a short-term basis.Federal Reserve System:The central monetary authority that controls the money operations in the United States.financial intermediary:An organization that helps the flow of money from people with money to save to people who
need to borrow money.firm:A business created by an entrepreneur with the intention of creating a profit by using factors of production to
make goods and services.fiscal policy:The changing of government spending and taxes in order to control and stabilize economic activity.fixed cost:The short-run costs a firm must pay regardless of the level of production.fixed factor:A factor resource or source of input that cannot be changed in the short run.fixed income:Income that is set and that does not change from year to year.flexible exchange rates:A system in which the laws of supply and demand are allowed to dictate the prices of various
international currencies.foreign aid:The money that more advanced countries provide to help the less developed countries in their economic
development.Glossary23 53999X Gloss.qxd 1/23/04 10:31 AM Page 249