Important economic terms to know

These numbers are intended to be illustrative, not real.

We can imagine markets at a local, national, and global scale. A diamond could be sold for a large amount of money, while water is given away for free. In general, market forces will cause the market to move towards the equilibrium point. Again, the opposite is generally true as well; the lower the price, the less they will want to produce the good.

Barter Important economic terms to know - A barter economy is one in which goods and services are traded for other goods and services without an intermediary form of payment like money. A group of five specialists could all trade their respective goods and services to each other.

Interest rates We hear this term a lot in our adult lives. The money supply is altered largely through Federal Reserve policy, which can be used to affect bank deposits and print more money.

Goods and services are exchanged at many levels. Get a free 10 week email series that will teach you how to start investing. Each dollar buys less and we all probably start to feel poorer.

There are many ways to produce value, so it makes sense that there are several types of capital that we can refer to. It is a means to standardize financial statements and ensure consistency in reporting. The Bare Bones You Need In order to even discuss economics, you will need to know what the following terms mean: Knowing these definitions will help you out in course discussions, writing papers, and reading assigned texts.

As a bonus, at the end of the list of economic definitions, you will find some bonus resources for expanding both your knowledge of economics and your vocabulary! When the demand is high, the price goes way up.

Financial Terms

Part of their motivation to do this is to ensure that their largest export market, the United States, can buy goods from them at a consistent price. Often times, consumption produces some form of waste. Mixed economies feature some elements of the ideals of capitalism and private ownership of the means of production along with elements of the ideals of socialism with the public governmental ownership of the means of production.

Gift Economy - A gift economy is one in which goods and services are freely given to others without any expectations for returns of the favor. This five specialists would be more wealthy capable of enjoying more free time, and having better quality goods and services than five equally capable people who all worked to provide for all their own needs on their own without specializing and trading with each other.

Traditional Economy - A traditional economy is based on agriculture. In this way the ability to take on debt by borrowing from someone else is a form of financial capital. Economically useful essentially means anything that has value to human beings. Take time to familiarize yourself with the definitions on this list.

Generally a lower price will mean that more units of the good are sold. This is one of the key benefits of market and trade concepts, as this interdependent network of specialists are capable of dramatically more effective action than would otherwise be possible.

Social capital refers to the power of social networks to accomplish work. This makes us value it less, but if there were a water shortage, we would gladly pay large amounts to make sure we had enough for our survival.

Costs and benefits This is basically the pros and cons list your mom has been encouraging you to make for every life decision, only applied specifically to economics.In order to even discuss economics, you will need to know what the following terms mean: Economics - Economics is the scientific study of the means of producing and distributing goods and services so that they may be consumed by others.

Economics: Key Terms and Definitions

Production - Production is the creation of a good or service that has value to another individual. What are some economic terms that everyone should know? Update Cancel. a mortgage, or other forms of credit.

The creation of credit is the most important source of new money, and new spending power, in the economy. Here are some basic economic terms that are always good to know. 1. GDP, GNP 2.

Price Elasticity of. Start studying Important Economic Terms. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

10 Economic Concepts Everyone Needs To Understand. You probably use it on a small scale when you find a really cute pair of shoes but don’t know if you should spend that much. Will the positive attention you get and your love for the shoes outweigh the dent you’ll be putting in your bank account?

economic terms, economics. Search. The Economist offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them. More from The Economist The.

Why it's Important to Understand Economics Some may think that economics is too difficult a subject to be taught to children and youth, and that such instruction should wait until college.

10 Common Finance Terms Every Newbie Needs To Know

Nothing could be more incorrect.

Important economic terms to know
Rated 5/5 based on 87 review