N
national debt:The amount of money that the federal government owes; it is owned by the American public.
natural monopoly:A single firm that has complete control over pricing and output in a market where it is impractical
to have competition.
natural resources:The total raw materials supplied by nature.
negative externality:The result when costs are shifted to people who are not directly involved with the production or
consumption of a good.
negative income tax:Poverty programs in which a person or family below some income level receives a payment from
the government rather than paying some amount of tax to the government.
nominal:The face value of a good or service measured in current currency values.
nondurable goods:Goods that do not last for a long time.
normal goods:Goods for which demand increases as income increases.
O
objectivity:Ruling out the aspects of a problem that might be influenced by personal attitudes or opinions.
oligopoly:A form of market organization in which there are relatively few firms.
open-market operations:The buying and selling of U.S. government securities by the Federal Reserve.
opportunity benefit:The portion gained from making a choice.
opportunity cost:The value of the next best alternative in a decision-making process.
outside lag:The time it takes for the effects of a policy change to be completely felt in the economy once the policy
has been determined.
P
parity price:A price that changes as prices of other goods change so that the income of producers can purchase the
same amount of these goods as in any given base year.
partnership:A type of business organization in which two or more people form a business.
patent:A legal protection for the inventor of a product or process that gives that person or company the sole rights to
produce the product or use the process for an specified period of time.
payment:Any monetary form of retribution for a good or service.
per capita income:The average income that is calculated on a per-person basis.
percentage:A ratio converted to a base using 100 equal parts.
perfect competition:A market organization in which a great many small firms produce a homogeneous product with
no individual price control.
CliffsAP Economics Micro & Macro
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