Demand - The amounts of goods or services that people are willing and able to buy at various prices. Money - Money is anything that is generally acceptable in exchange for goods and services. Money does not necessarily need to have any intrinsic value to serve as a medium of exchange. It is someone s willingness to accept it in payment that gives money its value in the exchange process. Profit - Profit is the income left over for the owners of a business after all the costs of production have been paid.
Profit is an incentive for entrepreneurs and a reward for taking a risk to start a business.
Businesses who make a profit have successfully satisfied the wants of consumers. Government pays for the goods and services it provides through taxing and borrowing. Pollution is an example of a spillover cost. Painting one s house is an example of a spillover benefit. Inflation - Inflation is an increase in the overall price level of goods and services, with a corresponding decrease in the purchasing power of money.