Economics Glossary

Comprehensive vocabulary flashcards covering key economic terms, definitions, and concepts from the lecture notes glossary.

assets

Items of economic value owned by a person, company, or country, such as property, investments, or financial claims.

average incomes

The typical amounts of income earned by people in a population or group.

barter

A system of exchange in which goods or services are traded directly without using money; to exchange in this way.

barter system

A system in which goods or services are exchanged directly for other goods or services instead of money.

basket of goods and services

A fixed selection of products and services used to measure changes in the cost of living over time.

central bank

The institution responsible for managing a country's monetary policy and influencing interest rates and the money supply.

charge

To ask a particular price or amount of money for a product or service.

consumer

A person who buys or uses goods and services.

Consumer Price Index (CPI)

An index that measures how the cost of a typical basket of goods and services changes over time.

consumption

The use or purchase of goods and services by households and other economic agents.

core inflation

A measure of inflation that excludes items with highly volatile prices, such as food and fuel, to show the underlying price trend.

cost-push inflation

Inflation caused by rising production costs that lead businesses to increase their selling prices.

cover its expenses

To earn or obtain enough money to pay the costs of operating or carrying out an activity.

currency

The system of money used in a particular country or economic area.

debt

Money that is owed by a person, company, or government and must be repaid.

declines

Reductions or downward movements in an economic measure such as output, income, or GDP.

deflationary spiral

A self-reinforcing cycle in which falling prices reduce spending and income, causing demand and prices to fall further.

demand

The quantity of a good or service that consumers are willing and able to buy.

demand-pull inflation

Inflation that occurs when demand for goods and services grows faster than the economy's ability to produce them.

deposit

An initial payment made when buying something, with the remaining amount paid later or financed.

depression

A severe and prolonged economic downturn involving large falls in output and very high unemployment.

dividends

Payments made by a company to its shareholders from profits.

dollarization

The adoption of the US dollar as an official or widely used currency in place of a national currency.

economic performance

How well an economy is functioning, often assessed through measures such as output, growth, inflation, and employment.

expenses

The costs that a person, business, or government must pay in order to operate or carry out activities.

foreign investment

Investment made by individuals or companies from one country in businesses or assets located in another country.

GDP per capita

A country's total GDP divided by its population, giving average economic output per person.

growth rates

The percentages by which an economic measure, such as GDP, increases or decreases over a period of time.

headquarters

The main office or central location from which an organization is managed.

housing bubble

A situation in which house prices rise far above sustainable levels, often because of easy credit and heavy speculation or borrowing.

housing market

The market in which houses and other residential properties are bought, sold, or rented.

hyperinflation

An extreme form of inflation in which prices rise extraordinarily quickly and money loses most of its value.

indicators

Statistics or measures used to show the condition, direction, or performance of an economy.

inequality

An uneven distribution of income, wealth, or economic opportunities among people or groups.

inflation

A general increase in prices across an economy over time, which reduces the purchasing power of money.

interest rates

The percentages charged for borrowing money or paid on savings, which influence the cost of credit and economic activity.

labour force

The people of working age who are employed or are actively looking for work.

labour market

The market in which workers supply labour and employers demand it.

living standards

The level of material well-being people enjoy, often related to income, consumption, housing, health, and access to goods and services.

loan

Money borrowed from a bank or another lender that must be repaid, usually with interest.

macroeconomics

The branch of economics that studies the performance of entire economies, including growth, inflation, unemployment, and trade.

microeconomics

The branch of economics that studies individual consumers, households, firms, and specific markets.

mortgage

A long-term loan used to buy property, with the property normally serving as security for the loan.

nominal GDP

The total value of goods and services produced in an economy measured at current prices, without adjusting for inflation.

overproduction

The production of more goods than consumers are willing or able to buy.

policymakers

People, especially in government or public institutions, who make decisions about economic or public policy.

production costs

The expenses a business faces when producing goods or services, such as wages, energy, and raw materials.

profit margins

The difference between a firm's revenue and its costs, usually expressed as a proportion of revenue.

profit-driven inflation

Inflation that is partly caused by firms increasing prices in order to expand profit margins beyond what higher costs alone require.

purchasing power

The amount of goods and services that a unit of money or a given income can buy.

real GDP

GDP adjusted for inflation so that changes reflect actual changes in output rather than changes in prices.

recession

A period of declining economic activity, usually involving falling GDP, weaker demand, and rising unemployment.

recovery

A period in which economic activity begins to improve after a recession or downturn.

remittances

Money sent home by people who are living and working abroad, usually to support family members.

reparations

Payments imposed on a country to compensate for damage or losses caused by war.

resources

Limited inputs such as money, labour, land, materials, and time that people and organizations use to produce goods and services or achieve goals.

restrictions

Rules or limits that reduce or control what people, businesses, or economic activities are allowed to do.

revenue

The income a business or government receives from sales, taxes, or other sources before costs are deducted.

stagflation

A difficult economic condition combining high inflation, high unemployment, and weak or stagnant economic growth.

stagnation

A prolonged period of little or no economic growth.

subsidize

To use public money to reduce the cost of a product, service, or activity for consumers or businesses.

supply

The quantity of goods or services that producers are willing and able to provide at a given time or price.

supply chain

The network of organizations and activities involved in producing and delivering a product from raw materials to the final customer.

tax cuts

Reductions in the amount or rate of tax that individuals or businesses must pay.

unemployment

The share or condition of people in the labour force who are willing and able to work but cannot find a job despite actively looking.

unemployment rate

The percentage of the labour force that is unemployed and actively seeking work.

wage

Money paid to a worker for work performed, often calculated by the hour, day, or week.

windfall taxes

Special taxes imposed on unusually high or unexpected profits, often during exceptional market conditions.

workforce

The people who are employed by a company, industry, or economy, or who are available for employment.