Economy

Traditional Economies

Economic decisions are based on customs and traditions.

Command Economies

An economic system where the government usually owns most of the property and makes decisions.

Market Economies

An economic system where private citizens own businesses and keep the profits earned.

Mixed Economies

Economic systems that are on a continuum between market and command, with some government controls always present.

Trade barriers

Anything that restricts free trade.

Tariffs

Taxes on goods that come into a country, increasing the price of imported goods.

Quotas

Restrictions on the amount of goods that can be imported into a country, potentially creating shortages.

Embargo

A prohibition on the sale of certain products to another country, often due to political disputes.

Natural resources

Raw materials that come from nature, used for production; can be renewable or non-renewable.

Capital resources

Goods produced by people to make other goods and services, such as machines and tools.

Human capital

The education, skills, and experience of workers.

Trade deficit

When a country imports more than it exports.

Trade surplus

When a country exports more than it imports.

Trade balance

When the value of imports is equal to the value of exports.

Consumer

Someone who buys goods or services.

Profit

The amount of money made by a business that exceeds the expenses.

Currency

A type of money that a country uses.

Entrepreneur

Someone willing to take a risk to start a new business.

Barter

The trading of goods and services without using currency.

GDP

Gross Domestic Product; the total value of goods and services produced within a country in a year.

Interdependence

Reliance on trade with other countries to fulfill a country's needs.

Globalization

Cooperation among nations in the production and exchange of goods and services.

Specialization

Concentration on a narrow range of goods and services.

Literacy Rate

Percentage of the population able to read and write.