Economics Vocabulary

By: Janiaya Wright


Market Economy-a decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system. Ex: United States

Command Economy-an economy in which production, investment, prices, and incomes are determined centrally by a government. Ex: Cuba

Traditional Economy-an original economic system in which traditions, customs, and beliefs shape the goods and the products the society creates. Countries that use this type of economic system are often rural and farm-based. Ex: Bantu

Market- a place where products are bought and sold. Ex: Walmart

Barter- a place where products are bought and sold. Ex: Trading a game for a remote controls

Embargo- an official ban on trade or other commercial activity with a particular country. Ex: stop trading baseball cards with friends

Tariff- a tax or duty to be paid on a particular class of imports or exports.

Ex: Dollar General taxes

Quota- a limited or fixed number or amount of people or things, in particular. Ex: a limited on shoes being ordered

Trade Barrier- measures that governments or public authorities introduce to make imported goods or services less competitive than locally produced goods and services. Ex: Quota, Tariff, and Embargo

Capital- wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing. Ex: machines

Human Capital- the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country. Ex: cash register

Capital Goods- goods that are used in producing other goods, rather than being bought by consumers. Ex: machinery for production of dump trucks

Factors Of Production- An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. Ex: land

Gross Domestic Product- the total value of goods produced and services provided in a country during one year. Ex: US GDP in 2013 was 16.77 trillion dollars

Standard Of Living- the degree of wealth and material comfort available to a person or community. Ex: the United States is one of the top 20 in the world

Literacy Rate: the percentage of people with the ability to read and write. Ex: the United states literacy rate in 2014 was 99%

Medium Of Exchange- an intermediary used in trade to avoid the inconveniences of a pure barter system. Ex: cigarettes in prisons

Mixed Economy- an economic system combining private and public enterprise. Ex: United Kingdom 47.3%

Goods- merchandise or possessions. Ex: food

Services- the action of helping or doing work for someone. Ex: nanny