Economics Basics

Supply and Demand

• The availability of a commodity, product, or service and the desire of buyers for it regulate its price.
• The relationship between supply and demand affects the market price of a product or service.

Inflation

• Inflation occurs when there is a general increase in prices and a fall in the purchasing value of money.
• It results in a decrease in the value of money.

Opportunity Costs

• Opportunity costs refer to the loss of potential gain from other alternatives when one alternative is chosen.
• It is the value of the next best alternative that is given up when a choice is made.

Capital

• Capital refers to wealth in the form of money or other assets owned by a person or organization.
• The purpose of capital is to start a company or invest.

Debt

• Debt refers to something, typically money, that is owed or due.
• It can be a financial obligation that needs to be repaid.

Gross Domestic Product (GDP)

• GDP is the total value of goods produced and services provided in a country during one year.
• It is a measure of a country's economic activity.

Interest

• Interest is money paid regularly at a particular rate for the use of money lent.
• It can also be the cost of delaying the repayment of a debt.

Profit

• Profit is a financial gain, the difference between the amount earned and the amount spent.
• It is the result of buying, operating, or producing something.

Interest Rate

• Interest rate is the cost of borrowing money expressed as a percentage.
• It is a measure of the rate at which interest is paid on a loan or investment.

Tariff

• Tariff is a tax imposed on the purchase of imports.
• It is usually imposed to stimulate more domestic production of the product in question.

Deficit

• Deficit occurs when a government, business, or household spends more in a given period of time than they generate in income.
• It results in a financial shortfall that needs to be addressed.