inflation —an increase in the overall level of prices in the economy inflation rate —the percentage change in the price index from the preced-ing period inflation tax —the revenue the govern-ment raises by creating money internalizing an externality —altering incentives so that people take ac-count of the external effects of their actions investment —spending on capital equipment, inventories, and struc-tures, including household pur-chases of new housing job search —the process by which workers find appropriate jobs given their tastes and skills labor force —the total number of work-ers, including both the employed and the unemployed labor-force participation rate —the percentage of the adult population that is in the labor force law of demand —the claim that, other things equal, the quantity de-manded of a good falls when the price of the good rises law of supply —the claim that, other things equal, the quantity supplied of a good rises when the price of the good rises law of supply and demand —the claim that the price of any good adjusts to bring the supply and demand for that good into balance liberalism —the political philosophy according to which the government should choose policies deemed to be just, as evaluated by an impar-tial observer behind a “veil of
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This note was uploaded on 08/01/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.