Economic terms to know and understand

Economics is the study of how societies, governments, businesses, households, and individuals allocate their scarce resources.

Economic terms to know and understand

There are two kinds of banks: A traditional bank that provides services such as checking and savings accounts, credit cards, and home and auto loans. A bank that specializes in services for companies rather than individuals. An investment bank sells and manages stocks and bonds. It also assists when two companies merge, or join together.

Bonds Certificates sold by companies or governments in order to raise money. Bonds are issued for a specific amount of time.

The government or company that sold the bond must pay interest to the buyer during that time. Let's say a city needs to raise money to build a new bridge. It decides to sell ten-year bonds to the public to get the necessary cash. If you were buying one of those bonds, you would pay a price known as the face value.

The city would promise to pay you back in ten years. Every year for ten years, the city would pay you interest on the bond. When the ten years were up, you would get back the face value you spent at the very beginning. Checking Account A bank account where money is kept so the owner can write checks.

A check is a piece of paper that tells a bank to pay the holder a certain amount of money. Credit The ability to borrow money. For example, one type of credit is a bank loan. A person might borrow money from a bank for a specific item, like a new house or car. Another type of credit is a credit card.

When a person has a credit card, the bank or credit card company has agreed to lend that person a certain amount of money over time. The person can borrow small sums of money at a time by putting purchases on the credit card. In both types of credit, a person is expected to pay back a minimum amount each month.

Macroeconomics |

The person must also pay a fee called interest see "Interest". When a person makes payments on time, he or she has what is known as a good credit history.

A person with a bad credit history will usually find it hard to get additional credit in the future. In the current economic crisis, credit is a big problem.

Banks and stores were giving people a lot of credit. Now there is not as much money to loan out.

4 Common Terms

Debt Money owed, usually as a result of borrowing. There are two main kinds of debt: The amount of money a country owes. It is the highest national debt in the world. If you have a savings bond, then some of that debt is owed to you! It owes the rest to itself.

That's because the government sometimes spends money that it does not actually have.Theory of production, in economics, an effort to explain the principles by which a business firm decides how much of each commodity that it sells (its “outputs” or “products”) it will produce, and how much of each kind of labour, raw material, fixed capital good, etc., that it employs (its.

The New York Times’ Paul Krugman noted recently that, in a moment of candor, John McCain admitted economics isn’t his thing.

“The issue of economics is not something I’ve understood as. Peterson Institute For International Economics. The Peterson Institute for International Economics is a private nonpartisan nonprofit institution for rigorous, intellectually open, and indepth study and discussion of international economic policy.

Sep 06,  · To better understand this remarkable political moment, we identified seven major terms from the anonymous New York Times op-ed and its aftermath. Here's what they mean and why they're so . modern economic theory and development Modern Economic Theory and Development Karla Hoff Joseph E.

Stiglitz The past 50 years have seen marked changes in our understanding of development. We know that development is possible, but not inevi-table.

Economic terms to know and understand

We have had a wealth of experiments. understand that the interaction of these slightly. May 01,  · The app contains practice questions for students taking the AP Macroeconomics and/or AP Microeconomics exams and 10 review lectures.

Here are all of the key graphs that you need to know .

Kid's Economic Glossary |