business cycle Fluctuations in economic activity, such as employment and production. □ economics The study of how society manages its scarce resources. □ efficiency The property of society getting the most it can from its scarce resources. □ equality The property of distributing economic prosperity uniformly among the members of society. □ externality The uncompensated impact of one person's actions on the well-being of a bystander. □ incentive Something that induces a person to act. □ inflation An increase in the overall level of prices in the economy. □ marginal changes Small incremental adjustments to a plan of action. □ market economy An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. □ market failure A situation in which a market left on its own fails to allocate resources efficiently. □ market power
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