Economics and Globalization Lecture Notes

This set of vocabulary flashcards covers fundamental economic terminology, sectors of the economy, economic cycles, systems, globalization, and the specific case study of Spain's economic expansion and recession.

Economics

The study of the production and distribution of goods and services which are necessary in order to satisfy human needs.

Consumer goods

Products that are consumed straight away, such as housing, clothes, shoes, and furniture.

Intermediate goods

Products used to produce other goods, such as a printing press or a car engine.

Services

Intangible activities provided by people, such as a haircut, dental work, or the transportation of goods.

Commercialization

The stage of the economic process involving activities related to the distribution and sale of goods or services.

Economic agents

Entities that carry out economic activities, including people (consumers), businesses, and the public sector.

Public sector

Managed by governments and financed by taxation to cover basic needs like healthcare, education, and infrastructure without needing to be profitable.

Raw materials

Resources taken from nature, such as minerals and water, which are used or transformed to satisfy human needs.

Technological capital

The combination of knowledge and techniques used in economic activities, essential for modernization and growth.

Financial capital

Money used to pay for raw materials, human resources, and technological capital; it also includes infrastructure and buildings.

Primary sector

Economic activities related to natural resources, including agriculture, fishing, forestry, and mining.

Secondary sector

Industries that transform raw materials into manufactured or consumer products, including energy and construction.

Tertiary sector

Activities that do not produce a physical product but use workers' knowledge and skills to provide services like healthcare and retail.

Quaternary sector

A highly-productive sector including services related to finance, information technology, telecommunications, R&D, and management.

Gross Domestic Product (GDP)

The total money value of all the goods and services produced in a country over a period of time, usually a year.

Per capita GDP

A measurement calculated by dividing the GDP by the total population of a country or region.

Expansion

A phase of the economic cycle characterized by economic growth and investment in production using capital from profits and savings.

Recession

A phase of the economic cycle where production, savings, and investments decrease, often leading to increased unemployment.

Stagnation

A phase in which the economy is stable, showing no significant growth or decrease in activity compared to previous years.

Active population

The total number of employed and unemployed people aged between 16 and 64.

Unemployment rate formula

$$\frac{\text{people not working}}{\text{people working}} \times 100$$

Balance of payments

The difference between the values of a country's imports and exports of goods and services.

Capitalist system

A free market system where the means of production are privately owned and prices are determined by supply and demand.

Communist system

A planned economy where means of production are state-owned and the central goal is equality of access to basic needs.

Mixed economy

A system common in European countries where means of production are both public and private, balancing profit and equality.

Supply

The number of products and services that are offered to consumers in the market.

Demand

The number of products and services that consumers are willing to pay for.

Globalization

The integration of national markets on a global scale, generating interdependency in culture, politics, and economy.

Multinational companies

Large companies located in more than one country, typically with a head office in a developed nation and various subsidiaries.

Offshoring

When companies relocate part of their operations to developing countries to source cheap labor and increase profits.

Trade blocs

Agreements between countries to reduce or eliminate barriers to trade, such as duties on imported and exported goods.

Free trade zones

Participating countries remove import and export duties while maintaining individual economic policies, such as NAFTA or ASEAN.

Common market

A trade bloc that removes duties and allows the free circulation of goods, people, and capital, such as Mercosur.

Economic union

A high level of integration where member states coordinate economic policies and allow free movement of people and goods, such as the EU.

Ley del suelo

A 1998 law in Spain enacted by President Aznar to privatize the land market and increase urbanizable terrain to lower housing prices.

Españistán

A term used to describe the state of the Spanish economy following the collapse of the 2000-2007 construction bubble and subsequent recession.