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Economic Terms and Concepts

Economic Terms and Concepts

This is a list of economic terms and concepts that it is important for debaters to understand.

Assets. Assets are things that have economic value or some other value to their owners.

Black market. The “black market” is the informal economy — where goods are bought and sold without any reporting to the government.  Black market transactions sometimes involve the sale of legal goods and sometimes involve the sale of illegal goods.

Capital.  Capital is property or money. It is often thought of as money that is contributed to start or support a business. 

Capitalism. Capitalism is a free-market system built on private ownership, in particular, the idea that owners of CAPITAL have PROPERTY RIGHTS that entitle them to earn a PROFIT as a reward for putting their capital at RISK in some form of economic activity.

Competitiveness.  A competitive economy is one that can produce goods and services that consumers want to use. Industry competitiveness is assessed within industries and international competitiveness is assessed across countries.

Consumer. A consumer is the purchaser of the good or service.

Credit. A loan or extension to pay a bill.

Currency. Currency is money..

Debt. Debt is the amount of money a person or business owns. For example, if you borrow $1,000 you have to repay the person or business who loaned you the $1,000.

Debt trap. Debt traps happen when a business, country, or person acquires debt but cannot pay it off. This is magnified when interest payments increase the amount of the debt.

Default. A default occurs when a person, business, or government decides to simply stop repaying a debt.

Economy.  The production and consumption of goods in an area or country. Economic Growth. An increase in the amount of goods or services produced per person in an economy. 

Investment. Money that is given to a business in the hopes that when the business grows the person who gives the original money gets their money back plus an increase in value.

Foreign Investment. Foreign investment occurs when someone who is located in one country gives money to a project in another country.

Free market. A free market exists when there is limited government direction of the economy. This also generally includes limited taxation and regulation.

Growth Domestic Product (GDP). The gross domestic product is the total value of goods and services produced in one country in a given year.

Inflation. Inflation is the increase in cost of a good relative to the value of money in the economy. 

Interest. Interest is the cost of borrowing money. For example, someone may lend you $1,000 and charge you $1,000 plus 5% interest. This means you would have to repay them $1,050.00

Investor. An investor is someone who contributes capital to a business.

Labor.  Labor refers to the amount of work it takes to do something.

Mixed economy. A mixed economy has elements of both capitalism and socialism.

Paris agreement. An agreement among all countries in the world to reduce global warming. When Trump was elected he said the US should withdraw from the pact.

Profit. The amount of money a business has left after the business pays its expenses.

Product. A product is a good that a consumer buys.

Property rights. If someone has property rights that means they own that particular property.

Protectionism. Protectionism is the idea of protecting a country’s industry from foreign countries by creating trade barriers such as tariffs to make it more difficult for another country to sell goods in the country that institutes the tariff.

Recession. A recession is an economic downturn.  Technically, an economy has two decline in two consecutive quarters (the full year has four quarters) for there to be a recession.

Social services/Social welfare. Social welfare are programs that are provided for people who have less money in order to support their access to needed food, clothing, medical care, and shelter.

Socialism. A socialist economy is an economy where the economy is directed by the government and most or all of the businesses are state owned.

Stimulus. When the government spends a significant  money to purchase goods and services that it doesn’t necessarily need (at least immediately) it is said to be enacting a stimulus program to boost economic growth. 

Supply chain. A finished product is usually composed of different parts that are produced by different companies. Global supply chains have have many different parts produced in many different countries.

Tariff.  A tariff is a tax put on an imported good in order to raise the cost of the good when it is sold in another country. Countries place tariffs because they know that if the seller has to pay the tariff that they will have to charge more for the goods, making it easier for goods sold by their own country to produce.

Tax.  A tax is a percentage-based fee that the government collects when a good is sold or income is earned. 

Trade. Trade is any buying and selling of goods. It usually refers to the buying and selling of goods between countries.

Free Trade. Free trade is the idea that countries should not charge the producers of goods in a different country an additional import tax when goods are sold in their own country.

Trade deficit.  The value of the total amount of goods and service sold to a country relative to the total amount of goods imported from that country.  If a country imports more goods than it exports, it has a trade deficit.

Unemployment. The number or percentage of people who are seeking jobs but cannot find jobs.

Wages. Wages are the pay that people make for their work.