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Laws of economics

General rules that guide the production, distribution, and consumption of goods.

Mercantilism

An economic system that advocates accumulating wealth (gold) in the state treasury.

Trade Balance

The difference between the amount of goods a nation sells and the amount it buys.

Tariffs

Taxes used by governments to discourage imported goods.

Imperialism

The establishment of colonies and territories for the benefit of their mother countries.

Physiocrats

Economists in the 1700s who first tried to create a science of production, distribution, and consumption of goods.

Samuel du Pont

Published "Physiocracy" ("The Rule of Nature").

True wealth

Belief that a nation’s true wealth comes from land and natural resources.

Laissez-faire

Economic principle meaning "let things alone"; minimal government intervention in the economy.

Classical economics

A belief system that originated with physiocrats advocating for a free market system.

Adam Smith

The founder of modern economics, known as the "Father of Modern Economics."

Wealth of Nations

Smith's most famous economic book, establishing basic principles of modern economics (1776).

Division of Labor

Separation of complex work into individual tasks to increase productivity.

Specialization

Allowing an individual to excel in one specific area, resulting in higher quality products or services.

Labor

The single most important aspect of any economy; essential for a productive economy.

Invisible Hand

The concept that the market's desires of producers and consumers are brought together to satisfy both.

Prosperity

General economic success; the ability to enjoy a variety of goods and services.

Wealth

The value of goods and finances that a person owns.

Ways to increase wealth

Six methods including producing goods from existing services and redistributing wealth.

True source of wealth

The belief that labor or work is the true source of wealth and prosperity.