What is the general rise in the price level that devalues money called?
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Inflation
The opposite (falling prices) is deflation.
💡 Did you know? Central banks often target around 2 % inflation.
All questions with answers
What is the total value of a country's annual output of goods and services called?
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Gross domestic product
It is the key measure of economic output.
💡 Did you know? Two consecutive quarters of shrinking GDP are usually called a recession.
Which interplay sets the price of a good in a market economy?
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Supply and demand
Where the two curves cross lies the market price.
💡 Did you know? When something is scarce and wanted, the price rises.
What is a phase in which the economy shrinks over a longer period called?
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Recession
A very deep, long recession is called a depression.
💡 Did you know? Unemployment usually rises during one.
What is a market dominated by a single supplier called?
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Monopoly
A few suppliers make an oligopoly.
💡 Did you know? Antitrust authorities aim to prevent monopolies.
What is the price paid for borrowed money called?
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Interest
The key rate is set by the central bank.
💡 Did you know? Compound interest makes capital grow exponentially.
What is state financial aid that lowers the cost of products or industries called?
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Subsidy
Examples are farm or energy subsidies.
💡 Did you know? They can distort markets.
What is the regular upswing and downswing of the overall economy called?
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Business cycle
It runs through expansion, boom, downturn and recession.
💡 Did you know? Governments try to smooth it out.
What is the share of profit a company pays out to its shareholders called?
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Dividend
It is usually paid per share each year.
💡 Did you know? Not every company pays a dividend.
What is it called when a state spends more than it takes in?
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Budget deficit
All deficits together make the national debt.
💡 Did you know? The opposite is a budget surplus.
What is the amount of goods a sum of money can buy called?
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Purchasing power
Inflation lowers money's purchasing power.
💡 Did you know? Countries are often compared by purchasing power parity.
What is the forgone benefit of the best option not chosen called?
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Opportunity cost
Studying means giving up wages: that is opportunity cost.
💡 Did you know? A core idea of economic thinking.
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