Global Economics Vocabulary (Political & Economic Systems)

armistice

An agreement between two (or more) countries at war to stop fighting. It is not a treaty to end the war or permanently settle the issues involved. 

benefit

An advantage; a competitive edge.

command economy

An economy in which all or most production capacity is owned and planned by the government. 

democracy

A form of government in which citizens choose and change the government through elections. Democracies typically aspire to providing all citizens with equal access to power and equal freedoms.

economic development

The pursuit of improved economic and social well-being by a country. Aspects of economic development include education, life expectancy, and GDP per capita.

economic growth

A rise in a country's GDP, reflecting increased production and consumption. 

economic indicator

A statistic about the economy that provides information about one of its important attributes, such as production, exports, savings, unemployment, or inflation.

embargo

A total ban on the supply of specific goods to a specific country and/or on imports of specific goods from a specific country. Embargoes are often used for political or security reasons rather than for economic reasons.

exchange rate

The value of one currency expressed in terms of another; the cost of a foreign currency in local currency

fair trade

Trade in which fair prices are paid to producers in developing countries with the goal of reducing poverty, treating workers and farmers ethically, and promoting environmental sustainability.

free trade

International trade of products and services without restrictions such as tariffs or regulations. 

gross domestic product (GDP)

The total value of all the goods and services a country produces in one year. 

human development index (HDI)

A measurement that looks at multiple aspects of the physical, economic, and social well-being of the people of a country, including life expectancy, knowledge and education, and standard of living as measured by GDP per capita. 

infrastructure

The energy, transportation, and communication systems of a country. 

intellectual property

The legal right to exclusive ownership of an idea, invention, technical method, phrase, visual symbol, formula, or other intangible (informational) asset. Intellectual property rights vary from one country to another. 

International Monetary Fund (IMF)

An international financial institution established to maintain order in the global monetary system.

isolationism

A foreign-policy approach in which a country avoids involvement with the outside world. This calls for avoiding all wars except in self-defense, strictly defined. Isolationism also tends to be associated with protectionist economic policies.

market economy

An economy in which production is privately owned and the qualities and prices of goods produced and consumed are determined by supply and demand. 

piracy

Using somebody else's intellectual property without their permission and without paying for it.

political economy

The combination of a country's political, economic, and legal systems, all of which are interdependent.

property rights

Legal protection for an owner's rights to a resource or asset including, for example, land or intellectual property.

purchasing power parity (PPP)

The value of a country's currency as shown by what it can buy in that country. A PPP adjustment to a country's calculated per capita GDP provides a measure of the goods and services it is producing. 

quota

A limit imposed by the government on the quantity of a particular good that can be imported into, or exported from, a country in a year. 

repatriation

The return of profits in a foreign country back to the home country of the company.

reward

Something of value given in exchange or in recognition for service, help, merit, or hardship.

risk

The probability of being exposed to danger, injury, or loss.

standard of living

The quality and quantity of goods and services that people receive. Per capita GDP is one indicator of the average standard of living in a particular country.

subsity

A payment or other assistance (e.g., use of land free of charge) given by the government to help an industry or company become more competitive, to make a product cheaper to consumers, or to avoid job losses when a business is in trouble.

tariff

A tax on a good moved from one country to another (usually a tax on imports). 

totalitarianism

A form of government in which the state controls most or all of the social, technological, economic, and political life of a country.

viable

Capable of working successfully; feasible.