If you have an appreciation for finance, budget some time to review this list of terms related to economics. You'll learn all about capitalism, markets, and stocks and bonds. Once you've mastered these words, your vocabulary will be one of your greatest assets.
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  1. 401-k plan
    a retirement savings plan that is funded by employee contributions and (often) matching contributions from the employer; contributions are made from your salary before taxes and the funds grow tax-free until they are withdrawn, at which point they can be converted into an IRA; funds can be transferred if you change employers and you can (to some extent) manage the investments yourself
  2. Adam Smith
    Scottish economist who advocated private enterprise and free trade (1723-1790)
  3. aggregate
    the whole amount
  4. allocate
    distribute according to a plan or set apart for a purpose
  5. antitrust
    relating to laws that prevent unfair business practices
  6. antitrust law
    law intended to promote free competition in the market place by outlawing monopolies
  7. appreciation
    an increase in price or value
  8. arbitration
    the hearing and determination of a dispute by a referee
  9. assembly line
    series of machines and workers that build step-by-step
  10. asset
    a useful or valuable quality
  11. assets
    anything of material value owned by a person or company
  12. balance sheet
    a record of the financial situation of an institution on a particular date by listing its assets and the claims against those assets
  13. bankruptcy
    a legal process for a corporation declared to be insolvent
  14. barter
    exchange goods without involving money
  15. bear market
    a market characterized by falling prices for securities
  16. benefit
    financial assistance in time of need
  17. black market
    an illegal market in which goods or currencies are bought and sold in violation of rationing or controls
  18. board of directors
    a group of persons chosen to govern the affairs of a corporation or other large institution
  19. bond
    a certificate of debt issued by a government or corporation
  20. boom
    a deep prolonged loud noise
  21. boycott
    refusal to have commercial dealings with some organization
  22. brain drain
    depletion or loss of intellectual and technical personnel
  23. brand name
    a name given to a product or service
  24. budget
    a summary of intended expenditures
  25. budget deficit
    an excess of expenditures over revenues
  26. bull market
    a market characterized by rising prices for securities
  27. business cycle
    recurring fluctuations in economic activity consisting of recession and recovery and growth and decline
  28. bylaw
    a rule adopted by an organization
  29. capital gain
    the amount by which the selling price of an asset exceeds the purchase price; the gain is realized when the asset is sold
  30. capitalism
    an economic system based on private ownership of assets
  31. carrying cost
    the opportunity cost of unproductive assets
  32. cartel
    a consortium formed to limit commercial competition
  33. central bank
    a government monetary authority that issues currency and regulates the supply of credit and holds the reserves of other banks and sells new issues of securities for the government
  34. certificate of deposit
    a debt instrument issued by a bank; usually pays interest
  35. ceteris paribus
    all other things being equal
  36. chamber of commerce
    an association of businesspeople to protect and promote business interests
  37. charter
    a document creating an institution and specifying its rights
  38. collateral
    a security pledged for the repayment of a loan
  39. collective bargaining
    negotiation between an employer and a trade union
  40. collusion
    secret agreement
  41. commercial bank
    a financial institution that accepts demand deposits and makes loans and provides other services for the public
  42. commodity
    any good that can be bought and sold
  43. communism
    a form of socialism that abolishes private ownership
  44. comparison-shop
    compare prices for a given item
  45. competition
    business relation in which two parties vie to gain customers
  46. conglomerate
    a group of diverse companies under common ownership
  47. consumer
    a person who uses goods or services
  48. consumer price index
    an index of the cost of all goods and services to a typical consumer
  49. consumption
    the utilization of economic goods to satisfy needs
  50. contract
    a binding agreement that is enforceable by law
  51. cooperative
    a jointly owned commercial enterprise
  52. copyright
    the exclusive right to sell a work
  53. corporation
    a business firm recognized by law as a single body
  54. cost-benefit analysis
    an analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs
  55. credit
    an estimate of ability to fulfill financial commitments
  56. credit card
    a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered
  57. credit union
    a cooperative depository financial institution whose members can obtain loans from their combined savings
  58. currency
    the metal or paper medium of exchange that is presently used
  59. debit card
    a card (usually plastic) that enables the holder to withdraw money or to have the cost of purchases charged directly to the holder's bank account
  60. debt
    money or goods or services owed by one person to another
  61. deficit
    an excess of liabilities over assets
  62. deficit spending
    spending money raised by borrowing
  63. deflation
    the act of letting the air out of something
  64. demand
    the ability and desire to purchase goods and services
  65. depreciation
    decrease in value of an asset due to obsolescence or use
  66. depression
    a long-term economic state with unemployment and low prices
  67. deregulation
    the act of freeing from rules
  68. discount rate
    interest on an annual basis deducted in advance on a loan
  69. disequilibrium
    loss of equilibrium attributable to an unstable situation in which some forces outweigh others
  70. disposable income
    income that is available to you for saving or spending
  71. dividend
    earnings of a corporation distributed to its shareholders
  72. Dow-Jones Industrial Average
    an indicator of stock market prices
  73. dumping
    selling goods abroad at a price below that charged in the domestic market
  74. easy money
    income obtained with a minimum of effort
  75. economic growth
    steady growth in the productive capacity of the economy
  76. economics
    science dealing with the circulation of goods and services
  77. economy
    the system of production and distribution and consumption
  78. economy of scale
    the savings in production cost due to mass production
  79. efficiency
    skillfulness in avoiding wasted time and effort
  80. elastic
    able to adjust readily to different conditions
  81. embargo
    a government order imposing a trade barrier
  82. eminent domain
    a right of the state to take private property for public use
  83. entrepreneur
    someone who organizes a business venture
  84. equality
    a state of being essentially equivalent
  85. equilibrium
    a stable situation in which forces cancel one another
  86. equity
    the ownership interest of shareholders in a corporation
  87. exchange rate
    the charge for exchanging currency of one country for currency of another
  88. excise tax
    a fee measured by the amount of business done
  89. expansion
    the act of increasing in size or volume or quantity or scope
  90. expenditure
    the act of spending money for goods or services
  91. export
    sell or transfer abroad
  92. Federal Deposit Insurance Corporation
    a federally sponsored corporation that insures accounts in national banks and other qualified institutions
  93. Federal Reserve Bank
    one of 12 regional banks that monitor and act as depositories for banks in their region
  94. Federal Reserve System
    the central bank of the United States
  95. fiat money
    money that the government declares to be legal tender although it cannot be converted into standard specie
  96. finance
    the commercial activity of providing funds and capital
  97. fiscal policy
    a government policy for dealing with the budget
  98. fixed cost
    a periodic charge that does not vary with business volume
  99. Food and Drug Administration
    a federal agency in the Department of Health and Human Services established to regulate the release of new foods and health-related products
  100. franchise
    an authorization to sell a company's goods or services
  101. full employment
    the economic condition when everyone who wishes to work at the going wage rate for their type of labor is employed
  102. game theory
    (economics) a theory of competition stated in terms of gains and losses among opposing players
  103. glass ceiling
    a ceiling based on attitudinal or organizational bias in the work force that prevents minorities and women from advancing to leadership positions
  104. globalization
    growth to a worldwide scale
  105. gold standard
    system that defines money's value in terms of precious metal
  106. good
    having desirable or positive qualities
  107. Great Depression
    the economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s
  108. gross
    the entire amount of income before any deductions are made
  109. gross domestic product
    the value of all things made and sold by a country in a year
  110. gross national product
    former measure of the United States economy
  111. horizontal integration
    absorption into a single firm of several firms involved in the same level of production and sharing resources at that level
  112. identity theft
    the co-option of another person's personal information (e.g., name, Social Security number, credit card number, passport) without that person's knowledge and the fraudulent use of such knowledge
  113. import
    bring in from abroad
  114. import duty
    a duty imposed on imports
  115. incentive
    a positive motivational influence
  116. index
    a numerical scale used to compare variables with one another
  117. indexation
    a system of economic regulation: wages and interest are tied to the cost-of-living index in order to reduce the effects of inflation
  118. indicator
    a number or ratio derived from a series of observed facts
  119. individual retirement account
    a retirement plan that allows you to contribute a limited yearly sum toward your retirement; taxes on the interest earned in the account are deferred
  120. inelastic
    not able to resume shape after stretching or compression
  121. inflation
    a general and progressive increase in prices
  122. innovation
    the act of starting something for the first time
  123. input
    a component of production, such as raw materials or labor
  124. insider trading
    buying or selling stock based on nonpublic information
  125. installment buying
    a system for paying for goods by installments
  126. insurance
    promise of reimbursement in the case of loss
  127. interdependence
    a relation between entities that rely on each other
  128. interest
    a fixed charge for borrowing money
  129. interest rate
    the percentage of a sum of money charged for its use
  130. intermediary
    a negotiator who acts as a link between parties
  131. investment
    laying out money or capital in an enterprise
  132. isolationism
    a policy of nonparticipation in international relations
  133. John Kenneth Galbraith
    United States economist who served as ambassador to India
  134. John Maynard Keynes
    English economist who advocated the use of government monetary and fiscal policy to maintain full employment without inflation (1883-1946)
  135. John Stuart Mill
    English philosopher and economist remembered for his interpretations of empiricism and utilitarianism (1806-1873)
  136. joint venture
    a venture by a partnership or conglomerate designed to share risk or expertise
  137. Karl Marx
    founder of modern communism
  138. labor
    productive work, especially physical work done for wages
  139. labor force
    the source of trained people from which workers can be hired
  140. labor movement
    an organized attempt by workers to improve their status by united action (particularly via labor unions) or the leaders of this movement
  141. labor union
    an employee organization that bargains with an employer
  142. Laffer curve
    a graph purporting to show the relation between tax rates and government income; income increases as tax rates increase up to an optimum beyond which income declines
  143. laissez faire
    a doctrine that government should not interfere in commerce
  144. law of diminishing returns
    a law affirming that to continue after a certain level of performance has been reached will result in a decline in effectiveness
  145. leading indicator
    one of 11 indicators for different sections of the economy
  146. liability
    an obligation to pay money to another party
  147. licensing fee
    a fee paid to the government for the privilege of being licensed to do something (as selling liquor or practicing medicine)
  148. liquidity
    being in cash or easily convertible to cash
  149. macroeconomics
    the branch of economics that studies the overall working of a national economy
  150. margin
    the net sales minus the cost of goods and services sold
  151. marginal
    just barely adequate or within a lower limit
  152. marginal cost
    the increase or decrease in costs as a result of one more or one less unit of output
  153. marginal utility
    (economics) the amount that utility increases with an increase of one unit of an economic good or service
  154. market
    a store where groceries are sold
  155. market economy
    an economy that relies on market forces to determine prices
  156. mediation
    a resolution of differences conducted by an impartial party
  157. medium of exchange
    anything that is generally accepted as a standard of value and a measure of wealth in a particular country or region
  158. merger
    the combination of two or more commercial companies
  159. microeconomics
    the branch of economics that studies the economy of consumers or households or individual firms
  160. Milton Friedman
    United States economist noted as a proponent of monetarism and for his opposition to government intervention in the economy (born in 1912)
  161. minimum wage
    the lowest salary that an employer is allowed to pay
  162. mixed economy
    an economic system that combines private and state enterprises
  163. money market
    a market for short-term debt instruments
  164. money supply
    the total stock of money in the economy
  165. monopoly
    a market in which there are many buyers but only one seller
  166. monopsony
    an economic market with several sellers but only one buyer
  167. mortgage
    a conveyance of property as security for repaying a loan
  168. multinational
    involving or operating in several countries
  169. mutual fund
    the pooled money that is invested in assets
  170. NASDAQ
    a computerized data system to provide brokers with price quotations for securities traded over the counter
  171. Nash equilibrium
    (game theory) a stable state of a system that involves several interacting participants in which no participant can gain by a change of strategy as long as all the other participants remain unchanged
  172. national debt
    the debt of the national government
  173. national income
    the total value of all income in a nation (wages and profits and interest and rents and pension payments) during a given period (usually 1 yr)
  174. natural resources
    resources (actual and potential) supplied by nature
  175. net
    an open fabric of string or rope or wire woven together
  176. New Deal
    the economic policy of F. D. Roosevelt
  177. New York Stock Exchange
    a stock exchange in New York
  178. nonprofit organization
    an organization chartered for other than profit-making activities
  179. North American Free Trade Agreement
    an agreement for free trade between the United States and Canada and Mexico; became effective in 1994 for ten years
  180. oligopoly
    a market in which a few producers control a commodity
  181. opportunity cost
    the benefits lost by choosing one option over another
  182. output
    production of a certain amount
  183. outsource
    obtain goods or services from an external supplier
  184. partnership
    a contract between persons who agree to share profits
  185. patent
    a document granting an inventor sole rights to an invention
  186. peak
    the period of greatest prosperity or productivity
  187. pension plan
    a plan for setting aside money to be spent after retirement
  188. per capita
    relating to each person individually
  189. personal income
    the income received by a single individual
  190. poverty line
    a level of income that provides for basic necessities
  191. price competition
    intense competition in which competitors cut retail prices to gain business
  192. price floor
    floor below which prices are not allowed to fall
  193. price index
    an index that traces the relative changes in the price of an individual good (or a market basket of goods) over time
  194. principal
    capital as contrasted with the income derived from it
  195. private property
    movable property (as distinguished from real estate)
  196. producer
    someone who manufactures something
  197. producer price index
    an index of changes in wholesale prices
  198. production
    manufacturing or mining or growing something for sale
  199. productivity
    the amount of work each worker can complete in a set time
  200. profit
    excess of revenues over outlays in a given period of time
  201. progressive tax
    any tax in which the rate increases as the amount subject to taxation increases
  202. property right
    the legal right of ownership
  203. proportional tax
    any tax in which the rate is constant as the amount subject to taxation increases
  204. proprietorship
    an unincorporated business owned by a single person who is responsible for its liabilities and entitled to its profits
  205. proration
    the proportional limitation of production or distribution of something (e.g. crude oil or natural gas) to some fractional part of the total capacity of each producer
  206. protective tariff
    a tariff imposed to protect domestic firms from import competition
  207. quota
    a prescribed number
  208. ration
    restrict the consumption of a relatively scarce commodity
  209. rationing
    restricting the consumption of a relatively scarce commodity
  210. recession
    a situation in which the state of the economy declines
  211. recovery
    return to an original state
  212. regulation
    the act of controlling or directing according to rule
  213. renewable resource
    any natural resource (as wood or solar energy) that can be replenished naturally with the passage of time
  214. reserve
    something kept back or saved for future use
  215. resource
    a new or reserve supply that can be drawn upon when needed
  216. revenue
    the entire amount of income before any deductions are made
  217. revenue tariff
    a tariff imposed to raise revenue
  218. royalty
    payment to the holder of a patent or copyright or resource
  219. safety net
    a large strong net to catch circus acrobats who fall or jump from a trapeze
  220. Samuel Gompers
    United States labor leader (born in England) who was president of the American Federation of Labor from 1886 to 1924 (1850-1924)
  221. savings
    a fund of money put aside as a reserve
  222. savings and loan
    a thrift institution that is required by law to make a certain percentage of its loans as home mortgages
  223. scarcity
    a small and inadequate amount
  224. Securities and Exchange Commission
    an independent federal agency that oversees the exchange of securities to protect investors
  225. service
    work done by one person or group that benefits another
  226. shortage
    an acute insufficiency
  227. socialism
    an economic system based on state ownership of capital
  228. specialization
    making something suitable for a particular purpose
  229. spillover
    (economics) any indirect effect of public expenditure
  230. stability
    the quality of being enduring and free from change
  231. stagflation
    slow economic growth with high prices and unemployment
  232. Standard and Poor's Index
    a broadly based stock market index
  233. standard of living
    the level of material goods and services available
  234. stock
    capital raised by a corporation through the issue of shares
  235. stockholder
    someone who holds shares of stock in a corporation
  236. stock market
    an exchange where security trading is conducted by professional stockbrokers
  237. strike
    refusal to work in protest against low pay or bad conditions
  238. subsidy
    a grant of financial assistance, especially by a government
  239. supply
    offering goods and services for sale
  240. supply-side economics
    the theory that lower taxes leads to financial prosperity
  241. surplus
    a quantity much larger than is needed
  242. tariff
    a government tax on imports or exports
  243. tax
    a charge that a citizen pays to support government programs
  244. tax bracket
    a category of taxpayers based on the amount of their income
  245. technology
    the practical application of science to commerce or industry
  246. Thomas Robert Malthus
    an English economist who argued that increases in population would outgrow increases in the means of subsistence (1766-1834)
  247. Thorstein Veblen
    United States economist who wrote about conspicuous consumption (1857-1929)
  248. tight money
    the economic condition in which credit is difficult to secure and interest rates are high
  249. trade
    the commercial exchange of goods and services
  250. trade balance
    the difference in value over a period of time of a country's imports and exports of merchandise
  251. trade barrier
    any regulation or policy that restricts international trade
  252. trade deficit
    an excess of imports over exports
  253. trademark
    a registered symbol identifying a product's manufacturer
  254. trade-off
    an exchange that occurs as a compromise
  255. transaction
    conducting business within or between groups
  256. transfer payment
    a public expenditure that is not for goods and services
  257. unemployment
    the state of not having a job
  258. unemployment rate
    the percentage of the work force that is unemployed at any given date
  259. union
    an employee organization that bargains with an employer
  260. utility
    a measure to be maximized in a situation involving choice
  261. variable
    a quantity that can assume any of a set of values
  262. vertical integration
    control of all aspects of a product's production by one firm
  263. wage
    payment for work
  264. World Trade Organization
    an international organization based in Geneva that monitors and enforces rules governing global trade
Created on March 3, 2017 (updated March 31, 2017)

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