E1
The main economic problem is ________.
A prolonged recession in economic activity. There was a big one in 1929.
DEPRESION
Total value of a country’s production in a year (within its borders).
GDP
The fall in the value of assets or currency; opposite of appreciation.
DEPRECIATION
A rise in the value of an asset or currency; the opposite of depreciation.
DEPRECIATION
When one person, company or country can produce more of something.
ABSOLUTE ADVANTAGE
The total of the money coming into a country minus the money going out of it.
BALANCE OF PAYMENTS
Buying goods from other countries.
IMPORTS
The price of labour.
MINIMUM WAGES
An institution that traditionally guards money and grants credit.
BANK
Total revenue of a person or company, minus the total cost.
INCOME
A driving force of market economy. The amount of a good or service available for any given price. Together with demand, it sets an equilibrium price.
The cost of borrowing money.
A free-market system built on private ownership and the right to profit from risk taken in economic activity. Its main value is liberty.
CAPITALISM
What you give up to get something else.
OPPORTUNITY COST
The illegal practice of selling something for less than the cost of producing it to drive rivals out of the market.
DUMPING/BLACK MARKET/ TRAFFICKING
Comes in many forms: gold coins, plastic or paper. It is better than barter to allocate an economy’s scarce resources. It is a medium of exchange, a unit of account and a store of value.
MONEY
The cost of borrowing money.
INTEREST
Raw materials bought in great quantities.
COMMODITIES/ NATURAL RESOURCES
The ability to carry economic transactions without trade barriers or special taxation.
FREE TRADE
When you have a lower opportunity cost –meaning you are more efficient- at producing something.
CREDIT
According to the Law of Demand, when the ______ rises, the quantity demanded drops.
PRICE
IS DETERMINED BY THE PRICES IN INFLATION
GDP NOMINAL
A WORD THAT DEFINES IMPORTS, EXPORTS.
CURRENCY
Money or assets (tools) put to production. One of the four factors of production.
What a central bank does in order to control money supply.
MONETARY POLICY
A kind of good that can be consumed by everybody.
PUBLIC GOOD
A driving force of market economy. The amount of a good or service people are willing and able to buy. Together with supply, it sets an equilibrium price.
DEMAND
When the government spends more than it receives.
DEFICIT
The fall in the value of a currency face to other currencies. Traditionally announced by the government in fixed exchange rate systems.
DEVALUATION
Adam Smith’s concept to understand the ability of the free market to allocate factors of production, goods and services to their most valuable use without further intervention.
Labour will produce wages, enterprise a profit; capital an interest and land a rent. All these can be known as different kinds of _______.
INCOME
makes the assumption that human beings will aim to fulfill their self-interests.
ECONOMICS
It deals with the government’s public spending and taxes.
FISCAL POLICY
The erosion of the purchasing power of a currency expressed in rising prices.
INFLATION
An agreement between companies to set prices or limit production.
COMPETITION
A period of slow or negative economic growth.
RECESSION/DEVALUATION
Collective ownership of the means of production. Its main value is equality.
COMMUNISM/ SOCIALISM
Index to check opportunities, acces to basic needs and social welfare
SOCIAL PROGRESS INDEX
The magnitude of the change in quantity when the price changes.
ELASTICITY/ INFLATION
If supply is high and demand is low → prices fall.
If demand is high and supply is low → prices rise.
LAW OF SUPPLY AND DEMAND
CONCERNED ABOUT THE MAXIMIZATION OF INDIVIDUAL WELFARE THROUGH BANKS, STOCK MARKET, LEASING OR INDUSTRY.
PRIVATE FINANCE
When a good or service is produced by a single company and it decides its price.
MONOPOLY
The trend for people, companies and governments to become increasingly interdependent. Offers new opportunities but also many threats.
GLOBALISATION
Buying goods from other countries.
IMPORTS
When a good or service is produced by a group of companies that decide its price.
COMPETITION
Opposed to free trade, the protection of a country’s economy from competition.
PROTECTIONISM
The main source of government funds in most countries.
TAXES
Selling products to other countries.
EXPORTS