Economics vocabulary words for Economics

Term Definition
Traditional Economy found in agricultural societies where people live the same way their parents and grandparents did; people produce what they need by farming or hunting and gathering; they make their own clothes and tools
Command Economy the government controls what is produced and how it is produced; the government owns the resources and decides who gets the products
Market (Capitalist) Economy a country's economic decisions are based on what its people want to buy and sell; people can own their own businesses and produce what they want (based on supply and demand)
Mixed Economy a combination of a market and command economy
Tariff taxes on imports
Quota limit on the amount of a good that can be imported
Embargo forbidding trade with a country
Specialization an efficient way to work to produce items that have a lower cost; increases trade because a country can get what it needs at the lowest cost when produced by someone who specializes in producing that item
Human Capital the workers of a country; investing in the education, skills, and training of workers will improve an economy
Physical Capital the factories or machinery; investing in new factories, machines, and technology helps and economy by providing workers with the newest and best tools
Entrepreneurs A person who takes a risk and provides the money to start and own a business. Provides jobs, tax money, and products for the economy.
Gross Domestic Product (GDP) the total value of the goods and services produced by a country's economy during a year
Consumer customer
producer maker of goods
supply amount of goods available
demand how many customers want the goods
exchange rate A fee that you pay to trade your money for another currency.
natural resources "gifts from nature" such as forests, water, minerals, and fertile soil
scarcity the limited supply of something
imports goods purchased from other countries
NAFTA North American Free Trade Agreement- a trade agreement between Canada, the United States, and Mexico that eliminated most tariffs and trade restrictions on goods and services traded among the countries.
bartering a system of exchanges whereby one good/service is given in return for another; bartering does not require monetary (money) exchange
economic system an economic model used by governments to determine what should be produced/provided in terms of goods and services, how, and for whom
wage term for one's financial earnings

Leave a Reply

Your email address will not be published. Required fields are marked *