Well Known Economic terms to be aware of

Economics serves as a guiding factor for many individuals and Government officials for calculating the subsistence production or sales to incur profit or loss after taking into account all the overhead costs. The economic terms examples like cost, profit, sales, demand, capital, money, investment, etc. tend to vary with time depending upon the joint activity of social classes.

Economists tend to divide the subject into two principal divisions – macroeconomics and microeconomics. These are the two most basic economics terminologies that one must be aware of if he/she wants to interpret an economist’s reports on his/her own.

 Macroeconomics is concerned with the economic situation of a wider geographical zone. We learn about the distribution and consumption of a service or product after it is manufactured in the region. Also, the subject gives us ample information about the contributing determiners like the rate of financial development, inflation, and public policies that are likely to alter the production, distribution, and utilization ratio.

Microeconomics deals with individual clients and their economists. The individual clients are designated as businessmen, investors, or generalized masses who seek the services of economists to develop their knowledge of the economy. 

Some unconventional yet basic economics terminologies shall also be discussed. The list first depicts the concept of normative economics. This field of the study describes an economic event in a quantified manner. The normative economists conduct their research based on past survey records that portray behavioural connectivity between cause and results. Normative economics either backs up or nullifies a statement based on proven findings. For example, the inflation rate of Patna is lower than that of Udhampur. This statement is either true or false according to the economists who compare the growth in the financial supply of both the cities before concluding. 

Then we came to know about applied economics. This subject improves the economist’s chances of interpreting the success determiners of a national policy drafting or business module by studying the underlying conditions in market production and consumption. The data is estimated either through input-output techniques or by applying econometrics.

To evaluate the dynamics between social and economic bearings we study rationalism in economics. The bottom-line of the principle puts stress on the fact that an individual’s rational activities will cast an impact on both macro and micro-economy.

Mainstream economics is another unconventional term that sums up the theoretical data of several economic models in a single report. Economists debate on a financial or non-financial factor based on mainstream or orthodox economics. It is different from heterodox thought. Heterodox ideologies apply to the new world comprising societies that express either socialism, Marxism, feminism, anarchism, etc. 

Balance of payment

A crucial economic indicator that explains the allocation of resources in a particular economy and records the gist of fund transfers between that economy and others are termed the balance of payments. The transactions fall under macroeconomics as they take place on a global level, i.e., between two or more nations. The balance of payment separates financial deals into two different ledgers namely the combined financial and capital folio; and the current folio. The current folio or the current account keeps a track of incoming net profit owing to international trade. The combined folio on the other hand evaluates a net transfer of the liabilities and assets resulting from a transaction between two parties. International Monetary Fund records the balance of payment for all the countries. 

Economic terms examples that are frequently used by economists 

• • Unemployed –This term refers to a class of people who have not participated in a labor community of a specific economy. 
  • Recession –When two back-to-back calendar quarters suffer a loss in real GDP, that particular economy is said to have experienced a recession. 
  • Money –Any liquid assets that cannot provide any returns to their owner are termed as money. The value of this asset varies very quickly with time. 

• Supply and demand –One of the basic economics terminologies is supply and demand. Demand is defined as the consumer base’s willingness to buy a product in a particular economy at a span of varying costs. On the other hand, the supply curve helps the economists to realize the producer’s interests in making sellable products within a range of feasible selling prices in the market. Supply and demand determine the cost of a service or product. 

• Cost and profit – Another pair of basic economics terminologies is identified as cost and profit. Cost refers to the monetary value of products or services. Profit signifies the excess margin acquired after selling a product or service. 

Conclusion 

Economics is a technical field of education. Thus one must be well acquainted with all the technical terms otherwise the modalities will seem to be overwhelming at times. Economists are the experts who’re hired to guide businesses and governments to successfully stabilize the performance of an economy.