Econ - Basic terms

GDP

Gross domestic product, the total product produced within a country's borders within a given time period.

Real GDP

GDP adjusted for inflation, showing the economy's actual growth in production.

Federal Surplus/Deficit

A surplus occurs when the federal government collects more than it spends; a deficit occurs when it spends more than the collected revenue.

National Debt

The total amount of money the federal government owes after running a deficit.

Stock

A unit of ownership in a company that gives the owner a claim on the company’s profits and assets.

Bond

A loan made by an investor to a government or corporation, promising to repay with interest over time.

NYSE

New York Stock Exchange, the largest stock exchange in the world.

Dow Jones Industrial Average

A stock market index that tracks the stock prices of 30 large, well-known US companies.

NASDAQ

A stock exchange known for tech and growth companies, including Apple, Microsoft, and Google.

S&P 500

A stock market index that tracks the 500 largest US companies, considered the best overall measure of the US stock market.

Inflation/Deflation

Inflation is a general rise in prices over time; deflation is a general fall in prices.

CPI

Consumer Price Index, a measure of inflation that tracks the average change in prices paid by consumers for typical goods and services.

Unemployment Rate

The percentage of unemployed individuals in the labor force looking for work.

Recession

A major economic slowdown featuring about half a year of negative GDP and high unemployment.

Depression

A significant version of a recession, marked by massive business failures, high unemployment, and increased poverty.

Interest Rate

The cost of borrowing money or the reward for saving, expressed as a percentage.

Mortgage

A long-term loan used to purchase a home or property, with the property serving as collateral.

The fed

The central bank of the United States, responsible for controlling the money supply and setting interest rates.

Jerome Powell

Chair of the Fed, responsible for leading monetary policy decisions in the United States.

Public Sector/Private Sector

The public sector includes government-run organizations; the private sector consists of businesses owned by individuals.

Import/Export

An import is a good or service brought into a country; an export is a good or service sold to another country.

Free Trade

A trade policy allowing goods and services to move between countries with little or no government restrictions.

Protectionism

A trade policy that uses tariffs, quotas, or regulations to protect domestic industries from foreign competition.

Exchange Rate

The value of one country’s currency compared to another country's currency.

Strong Dollar/Weak Dollar

A strong dollar can buy more foreign currency; a weak dollar buys less but can make exports cheaper.

Globalization

The increasing economic, cultural, and political interconnectedness of countries through trade, technology, and communication.