Economy Vocabulary

The state of being without a paid job while actively seeking work

“Youth unemployment remains persistently high in parts of southern Europe.”

An increase in the production of goods and services in an economy over a period of time

“Sustained economic growth has lifted millions out of poverty in East Asia.”

The rate at which the general level of prices for goods and services rises over time

“High inflation erodes the purchasing power of households on fixed incomes.”

Government decisions about taxation and public spending to influence the economy

“Expansionary fiscal policy was used to stimulate demand during the 2008 financial crisis.”

Investment made by a company or individual in one country into business interests in another country

“Stable institutions and low corruption attract higher levels of foreign direct investment.”

The amount by which a country's imports exceed its exports

“The widening trade deficit prompted calls for protective tariffs on imported goods.”

Government policies of spending cuts and fiscal tightening, usually to reduce public debt

“Austerity measures implemented after the 2008 crisis disproportionately affected the most vulnerable.”

The unequal distribution of income among individuals or groups within an economy

“Technological change is a key driver of growing income disparity between skilled and unskilled workers.”

Central bank decisions about interest rates and money supply to control inflation and support employment

“Central banks tightened monetary policy aggressively to control post-pandemic inflation.”

A labour market characterised by short-term contracts and freelance work rather than permanent employment

“The gig economy offers flexibility but denies workers traditional benefits and job security.”

An economic policy of restricting imports to protect domestic industries from foreign competition

“Critics of protectionism argue it raises consumer prices and triggers retaliatory tariffs.”

Long-term unemployment caused by fundamental changes in an economy, such as automation displacing workers

“Structural unemployment in former mining towns requires retraining programmes, not just stimulus spending.”

An economic ideology favouring free markets, deregulation, privatisation, and reduced government intervention

“Critics blame neoliberalism for the erosion of public services and widening inequality.”

A statistical measure of income or wealth inequality within a nation, ranging from 0 (perfect equality) to 1 (maximum inequality)

“A rising Gini coefficient in the UK signals growing wealth concentration at the top.”

A monetary policy tool in which a central bank purchases assets to increase money supply and stimulate lending

“Quantitative easing helped prevent economic collapse after the 2008 financial crisis, but critics warn of long-term inflationary risk.”