When I was younger, I just didn’t see the point of building one’s vocabulary.
Why use difficult, harder-to-pronounce words when short and simple ones can do the trick?
But of course, as I grew up, I realized the matter wasn’t so simple.
A great vocabulary isn’t just a sign of a superior education. It’s also an essential tool for successful communication.
And yes, it gives you a greater edge over others.
When it comes to economics, knowing the right English jargon for your job is important.
It not only highlights your technical expertise, but it also shows that you’re extremely committed to your job.
It shows that you have a keen eye for details and that you’re aware of the subtle nuances in different concepts and definitions.
A good vocabulary therefore demonstrates that you can be trusted to help out in any scenario—be it negotiating with a client or drafting a difficult proposal. In short, it increases your chance of getting and keeping your job!
How Can You Improve Your Economics Vocabulary?
Obviously, one way you can improve your English economics vocabulary is to read this post, study the words carefully and start using them in real-life situations. But when you’ve finished reading this post, you can also sign up for online courses such as the ones on Coursera, Open Culture and Alison.
You can also check out other vocabulary lists such as the ones on FluentU on banking and accounting, or elsewhere, such as this list from the Guardian. Make time to read business and economics newspapers and magazines such as the Economist.
Additionally, you can use FluentU‘s videos to learn vocabulary in a natural and engaging way.
There’s a very simple way you can make learning economics a daily habit, and it only takes fifteen minutes per day. Spend the first ten minutes speed learning at least three to five new concepts or words, and then use the last five minutes to review them by trying to make sentences or applying them to real-life situations.
Whenever you learn a new word or concept, try to use it soon in a conversation or simply practice it by role-playing with yourself or with a friend. Try doing this for one or two months at a continuous stretch, and soon enough, you’ll see amazing results that will motivate you to take your studies even further.
English for Economics from A to Z: 26 Words You Should Know
Here are 26 must-know economics terms in English that will go a long way in aiding you in your daily job or improving your prospects of finding a new job.
The definitions provided here have been adapted from the much longer and more complicated definitions on Wikipedia, Investopedia and online business dictionaries, to make for easier understanding. You can also click on any word to discover more details about it.
These are the records of all financial transactions, including expenses and receipts, of an organization or an individual.
Sheila needs to check her accounts to see if she can afford the new house.
2. Balance Sheet
This is a statement of a company’s assets, liabilities and capital at a specific point in time. It’s also called a statement of financial condition. An organization’s balance sheet gives an idea of how much they own and owe, as well as the amount invested by shareholders.
One look at the balance sheet told Arjun that the company wasn’t worth investing in.
3. Capital Gains Tax (CGT)
This is the amount of tax that is payable on the profit from the sale of a capital asset (either a property or an investment).
Before you sell off the old farmhouse, keep in mind the capital gains tax that you’ll have to pay.
This is just the opposite of inflation; it’s the reduction in supply of circulated money in any economy.
The recent deflation, brought on by government policies, decreased the prices, but the wages went down as well.
5. Earnings Per Share (EPS)
This is the net income of a company, divided by its number of outstanding shares. EPS indicates a company’s profitability.
Mark’s team decided to join the company because of the company’s increasing earnings per share.
6. Financial Year, or Fiscal Year
These terms both refer to a period of 12 consecutive months or 52 consecutive weeks, after which financial reports are prepared. It may not match with a calendar year, and is also sometimes called a tax year. In the U.S., it’s called a fiscal year.
The next fiscal year will begin in October 2017 and go until September 2018.
7. Golden Rule
This is a term in fiscal policy that basically means that over an economic cycle, the government should borrow to pay for investments that benefit future generations.
Considering the dismal state of the economy, the citizens are convinced that the government hasn’t followed the golden rule.
8. Half Year
This is an assumption that newly acquired assets are in use halfway through the year, regardless of the actual length of time the assets have been in use.
We need to follow the half year convention to calculate the company’s annual taxes.
9. Income Tax
This is the tax levied by the government on the total income generated by individuals and companies.
The loopholes in the taxation system helped the wealthy oil company owner escape millions of dollars in income tax, without technically violating the law.
10. Joint Account
This refers to a bank account registered under the names of two or more individuals. All members can deposit and withdraw money from it.
Tired of sharing joint accounts with her ex-husband, Nina opened a new bank account just for herself long before the divorce was finalized.
11. Keynesian Economics
This refers to the various theories formulated by the British economist John Maynard Keynes during the Great Depression, which he published in his 1936 book “The General Theory of Employment, Interest, and Money.”
While studying the history of how economics developed as a discipline, make sure you learn about Keynesian Economics as well.
12. Liquid Asset
This refers to cash, or any asset that can be quickly converted to cash without loss in value.
He insisted that I need to have enough liquid assets to qualify for a home loan.
13. Macroeconomics and Microeconomics
Macroeconomics refers to the study of whole (aggregate) economies or economic systems, while microeconomics refers to the study of individual units, like a person or a company.
If you want to analyze general trends in an economy, study macroeconomics. But if you’re looking to run a successful business, microeconomics is the key.
14. Net Asset Value (NAV)
The NAV is the value of an entity’s assets, minus the value of its liabilities.
A mutual fund’s net asset value will tell you if your investment is worth it.
An oligopoly is a name for a market which is dominated by a few sellers, and therefore has less competition.
If you want to make it big in an oligopoly, keep an eye out for rival markets and be strategic about your financial decisions.
16. Pay As You Earn (PAYE)
This is a tax payment method where your taxes are deducted from your salary itself, before you receive your salary.
I thought the PAYE system would cut down on my earnings, but it has actually made my life easier.
This is a share or a set number of things or people. In economics, quotas are usually limitations on imports or exports.
The new reform in the import quota is a great help for domestic suppliers.
18. Real Interest Rate
This is the current rate of interest offered by a bank, minus the rate of inflation.
The bank’s new interest rate is 5.5% but with the rate of inflation currently at 2%, the real interest rate is only 3.5%.
A shareholder is any person or company that owns shares of stock in a corporation.
James recently became a shareholder in a major corporation.
20. Tax Haven
Simply speaking, this refers to an area where taxes are imposed at a low rate (or not at all).
Jimmy wanted to know more about offshore accounts so I told him to research tax havens.
21. Unit Trust
This is an organization that pools money from small investors and invests it in shares and stocks under a trust deed.
If you’re a first time investor, consider partnering with a unit trust.
22. Value-added Tax (VAT)
A value-added tax is a consumption tax on goods and services.
Before going to a fancy restaurants, check their VAT rates unless you want to be surprised by the bill.
23. White Knight
A white knight is the person or company that “saves” a corporation from being taken over by a hostile company.
Patrick Soon-Shiong is considered a white knight for investing in Tribune Publishing, which would have otherwise been taken over by Gannett Co.
This is a term that refers to the production of something at minimum possible cost. It’s the degree of efficiency maintained by corporations when there’s a lack of competitive pressure.
John’s company, being a small one, is unable to compete with the major firms. The workers know this, which is why they don’t work as hard—no wonder their x-efficiency fails.
This term refers to the yearly income earned from an investment. It’s often expressed as a percentage.
What’s the minimum yield you expect from this investment?
26. Zombie Funds
A colloquial term for a closed fund, this term refers to a for-profit life insurance fund that has been closed to new business.
Joe’s life insurance company is nothing more than a zombie fund, so it’s better stay away from it.
As mentioned before, spending just a few minutes a day learning and practicing these words can quickly help you improve your English. Before you know it, your vocabulary will grow by leaps and bounds!
Even if you’re new to the field of economics, there’s no need to fret. A proper understanding of the basics will go a long way in helping you out. And above all, be confident and believe in yourself and your abilities.
And One More Thing...
If you like learning English through movies and online media, you should also check out FluentU. FluentU lets you learn English from popular talk shows, catchy music videos and funny commercials, as you can see here:
The FluentU app and website makes it really easy to watch English videos. There are captions that are interactive. That means you can tap on any word to see an image, definition, and useful examples.
For example, when you tap on the word "searching," you see this:
Learn all the vocabulary in any video with quizzes. Swipe left or right to see more examples for the word you’re learning.
The best part? FluentU remembers the vocabulary that you’re learning. It recommends examples and videos to you based on the words you’ve already learned. You'll have a truly personalized experience.
Start using FluentU on the website with your computer or tablet or, better yet, download the FluentU app from the iTunes or from the Google Play store.
Archita Mittra is a freelance writer, artist, educator and self-taught Italian speaker. Feel free to contact her for freelancing enquiries.
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