business firm  a business organization controlled by a single management
circular flow diagram  a model showing the flow of output and income from one sector of the economy to another
consumer sovereignty  the supreme authority of consumers to determine, by means of their purchases, what is produced
consumption  household spending
corporation  a legal entity owned by shareholders whose liability for the firm’s losses is limited to the value of the stock they own
exports  products that a country sells to other countries
financial intermediaries  institutions that accept deposits from savers and make loans to borrowers
household  one or more persons who occupy a unit of housing
imports  products that a country buys from other countries
multinational business  a firm that owns and operates producing units in foreign countries
net exports  exports minus imports
partnership  a business with two or more owners who share the firm’s profits and losses
private sector  households, businesses, and the international sector
public sector  the government
sole proprietorship  a business owned by one person who receives all the profits and is responsible for all the debts incurred by the business
trade deficit  the situation that exists when imports exceed exports
trade surplus  the situation that exists when imports are less than exports