Economic Vocabulary Terms

What is Economics? Social science that seeks to describe the factors which determine the production, distribution and consumption of goods and services. Explains how and what and why something is produced, how is it sold, who and what is bought

Collective Farming Communal farming in which several farmers run their holdings as a joint enterprise

Command Economy A system of resource management in which decisions about production and distribution of goods and services are made by a central authority (the government)

Commodity People with common interests living in a particular area

Cottage Industry A business that employs workers in their homes

Trade Deficit Spending more on trade imports than making on exports

E-Commerce Buying and selling on the internet

Free Enterprise A system in which private individuals or groups have the right to own property or businesses and make a profit with limited government interference

Free Trade Zone An area of a country in which trade restrictions do no apply

Infrastructure Public services or systems such as power, water and sewage, transportation and communication networks, and schools and health care facilities.

Market Economy An economic system based on free enterprise, in which businesses are privately owned and production and prices are determined by supply and demand

Industrialization The process in which a society or country transforms itself from a primarily agricultural society into one based on the manufacturing of goods and service

Tariff A tax on imports

Capitalism A system in which factors of production are privately owned

Mixed Economy A system of resource management in which the government supports and regulates enterprise through decisions that affect the marketplace

Regulates To govern or direct according to rule

More Developed Counties A country that has highly developed and advanced technological infrastructure

Less Developed Countries A country that exhibits the lowest indicators of socioeconomic development

Newly Industrialized Countries A country that has begun transitioning from primarily agricultural to primarily manufacturing and industrial activity Mexico, China

Gross Domestic Product (GDP) The value of goods and services produced within a country in one year Produced within the countries borders

Gross National Product (GNP) The value of goods and services produced by a country in one year Goods and service produced outside the countries borders

Natural Resources Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Trade Surplus Earning more money from export sales than spending for imports

Traditional Economy A system in which tradition and customs control all economic activity EX) Amish