Income - money received during a given period

Inflation - rise in prices brought about by expansion of the supply of money, credit.

A resource is a material or service that is used to make goods or services. Not all resources are scarce.

Free resources, such as air, are so abundant that they can be obtained without charge. Scarce resources are called economic resources.

Because resources are scarce, only a limited amount of goods and services can be produced from them, and there arises the necessity for choice. If society increases the output of one good, it must decrease the output of some other good.

The alternative cost of using resources to increase the production of one good is the reduction in the output of the other good.

Government makes economic decisions about production and distribution with those on top of the hierarchy giving economic commands to those further down the ladder. This type of economy is called command economy.

In other cases, decisions are made in markets – a market economy. Here most economic questions about production and consumption are solved by individuals and private firms.

No contemporary society falls completely into either of these polar categories. Rather, all societies are mixed economies, with elements of market and command.

Definitions:

Value: worth, marketable price, estimation.

Cost: price to be paid for a thing

Price: money for which a thing is bought or sold.

Wage(s): payment made or received at regular intervals (usually weekly) for manual

or mechanical work or services

Salary: fixed monthly or quarterly payment for regular employment on a yearly basis

Fee: charge or payment for professional advice or services (e.g. doctors, lawyers,

private teachers, etc)

Currency: a particular type of money used in a state, total amount in circulation

Hard currency: convertible money

Inflation: fall in value of money, increase in amount of paper money circulating<

rise in level of prices due to relative decrease of purchasing power

Interest rate: a sum paid by the borrower for the use of the sum lent

Monetarism: a financial policy of reducing taxes along with cutting public

spending