Key Economic Terms Vocabulary

A set of vocabulary flashcards covering essential economic concepts and terms.

Absolute Advantage

The ability of an entity to produce more of a good or service than competitors using the same amount of resources.

Agglomeration Economies

Benefits that firms obtain by locating near each other, which can lead to cost reductions and increased productivity.

Assembly Line

A manufacturing process in which parts are added in a sequential manner to create a finished product.

Base Industry

The basic industry that provides the foundation for the economy, including primary goods and services.

Break-of-Bulk Point

A location where goods are transferred from one mode of transport to another, often reducing transport costs.

Capitalist Class

The socio-economic class that owns the means of production and capital.

Carbon Neutrality

Achieving a balance between emitting carbon and absorbing carbon from the atmosphere.

Carbon Offsets

Reduction in emissions of carbon dioxide or greenhouse gases made in order to compensate for emissions produced elsewhere.

Climate Change

Long-term alterations in temperature, precipitation, wind patterns, and other elements of the Earth's climate system.

Cogeneration

The simultaneous production of electricity and useful heat from the same energy source.

Commercial Farmers

Farmers who produce crops or livestock for sale in the marketplace.

Commodity Dependence

A situation where a country's economy relies heavily on the export of a single or few commodities.

Comparative Advantage

The ability of a party to produce a particular good or service at a lower opportunity cost than another party.

Competitive Advantage

The attributes that allow an organization to outperform its competitors.

Complementarity

A relationship where two goods or services enhance each other's demand.

Containerization

A system of intermodal freight transport using intermodal containers.

Crude Oil

Unrefined petroleum extracted from the ground that can be processed into fuels.

Customs Union

An agreement between countries to eliminate tariffs and allow free trade among them.

Deindustrialization

The process of reducing industrial activity in a country or region.

Dependency Theory

A theory that explains the economic dependence of developing countries on developed countries.

Economic Sector

A distinct subset of the economy, classified according to its business activities.

Ecotourism

Responsible travel to natural areas that conserves the environment and improves the well-being of local people.

Environmental Pollution

Contamination of the environment by harmful substances.

Export Processing Zone (EPZ)

A designated area in which goods may be landed, handled, manufactured, or reconfigured and reexported without the intervention of customs authorities.

Financial Market

A marketplace for the trading of financial assets such as stocks and bonds.

Fordism

A system of mass production characterized by assembly line work and standardized products.

Formal Sector

The part of the economy that is regulated by the government and includes businesses that are registered and pay taxes.

Free Trade Zone

A designated area where goods may be imported, handled, manufactured, or reconfigured and reexported without intervention of customs authorities.

GDP per Capita

A measure of a country's economic output that accounts for its number of people.

Gender Empowerment Index (GEI)

A measure of gender equality in education, political participation, and economic participation.

Gender Inequality Index (GII)

A measure of gender disparities in reproductive health, empowerment, and labor market.

Gross Domestic Product (GDP)

The total value of all goods and services produced within a country during a specific time period.

Gross National Income (GNI)

The total income earned by a country's residents and businesses, including any income earned abroad.

Growth Pole

A geographic area where economic development is centered around one or more key industries.

High Technology Industry

Industries that involve advanced scientific and engineering knowledge, typically involving research and development.

Human Development Index (HDI)

A composite statistic of life expectancy, education, and per capita income indicators, used to rank countries.

Income Distribution

The way in which a nation’s total economy is divided among its population.

International Division of Labor

The theoretical division of labor that occurs on a global scale.

Labor Productivity

The amount of goods and services produced by a worker in a given amount of time.

Mass Consumption

The widespread buying of products by a large number of people.

Mass Production

The large-scale manufacturing of standardized products, often using assembly line techniques.

Neoliberalism

An economic approach advocating for free markets, deregulated trade, and minimal government intervention.

Non-Point Source Pollution

Pollution that does not originate from a single, identifiable source.

Offshoring

The relocation of a business process from one country to another.

Organization of the Petroleum Exporting Countries (OPEC)

An intergovernmental organization of oil-exporting nations that coordinates and unifies petroleum policies.

Outsourcing

Obtaining goods or services from an outside supplier rather than producing them in-house.

Point Source Pollution

Pollution that originates from a single source or location.

Post-Fordism

An economic system characterized by flexible production processes and diversified products.

Primary Sector

The part of the economy that extracts and processes natural resources.

Protectionism

Economic policy of restricting trade between countries through tariffs and other regulations.

Purchasing Power Parity (PPP)

An economic theory that compares different countries' currencies through a 'basket of goods' approach.

Quaternary Sector

The sector of the economy focused on knowledge-based activities involving services such as research and development.

Quinary Sector

The sector of the economy focused on high-level decision making and services such as healthcare and education.

Resource Depletion

The consumption of a resource faster than it can be replenished.

Secondary Sector

The part of the economy that processes, converts, and assembles raw materials into products.

Semiperiphery

Countries that share characteristics of both core and peripheral nations in the world system theory.

Shipping Container

A standard-sized container for transporting goods; enables multi-modal transport.

Special Economic Zone (SEZ)

A designated area in a country where business and trade laws differ from the rest of the country.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Tertiary Sector

The part of the economy that provides services to consumers and businesses.

Trade Embargo

A government order prohibiting trade with a specific country or the exchange of specific products.

Transnational Corporation (TNC)

A corporation that operates in multiple countries.

Wage Labor

Labor paid on an hourly, daily, or piecework basis.

Working Class

The socioeconomic class consisting of people who are employed for wages.