Bond: A certificate reflecting a firm's promise to pay the holder a periodic interest payment until the date of maturity and a fixed sum of money on the designated maturing date.

Budget deficit: The amount each year by which government spending is greater than government income.

Budget surplus: The amount each year by which government income exceeds government spending.

Capital: The physical equipment (buildings, equipment, human skills) used in the production of goods and services. Also used to refer to corporate equity, debt securities, and cash.

Capitalism: An economic system in which the means of production are privately owned and controlled and which is characterized by competition and the profit motive.

Central bank: A country's principal monetary authority, responsible for such key functions as issuing currency and regulating the supply of credit in the economy.

Commercial bank: A bank that offers a broad range of deposit accounts, including checking, savings, and time deposits, and extends loans to individuals and businesses — in contrast to investment banking firms such as brokerage firms, which generally are involved in arranging for the sale of corporate or municipal securities.

Demand: The total quantity of goods and services consumers are willing and able to buy at all possible prices during some time period.

Depression: A severe decline in general economic activity in terms of magnitude and/or length.

Deregulation: Lifting of government controls over an industry.

Dow Jones Industrial Average: A stock price index, based on 30 prominent stocks, that is a commonly used indicator of general trends in the prices of stocks and bonds in the United States.

Economic growth: An increase in a nation's capacity to produce goods and services.

Electronic commerce: Business conducted via the World Wide Web.

Exchange rate: The rate, or price, at which one country's currency is exchanged for the currency of another country.

Exports: Goods and services that are produced domestically and sold to buyers in another country.

Federal Reserve System: The principal monetary authority (central bank) of the United States, which issues currency and regulates the supply of credit in the economy. It is made up of a seven-member Board of Governors in Washington, D.C., 12 regional Federal Reserve Banks, and their 25 branches.

Fiscal policy: The federal government's decisions about the amount of money it spends and collects in taxes to achieve full employment and a noninflationary economy.

Free trade: The absence of tariffs and regulations designed to curtail or prevent trade among nations.

Gross domestic product: The total value of a nation's output, income, or expenditure produced within its physical boundaries.

Human capital: The health, strength, education, training, and skills that people bring to their jobs.

Imports: Goods or services that are produced in another country and sold domestically.

Inflation: A rate of increase in the general price level of all goods and services. (This should not be confused with increases in the prices of specific goods relative to the prices of other goods.)

Intellectual property: Ownership, as evidenced by patents, trademarks, and copyrights, conferring the right to possess, use, or dispose of products created by human ingenuity.

Investment: The purchase of a security, such as a stock or bond.

Labor force: As measured in the United States, the total number of people employed or looking for work.

Market: A setting in which buyers and sellers establish prices for identical or very similar products, and exchange goods or services.

Market economy: The national economy of a country that relies on market forces to determine levels of production, consumption, investment, and savings without government intervention.

Monetary policy: Federal Reserve System actions to influence the availability and cost of money and credit as a means of helping to promote high employment, economic growth, price stability, and a sustainable pattern of international transactions.

Money supply: The amount of money (coins, paper currency, and checking accounts) that is in circulation in the economy.

Mutual fund: An investment company that continually offers new shares and buys existing shares back on demand and uses its capital to invest in diversified securities of other companies. Money is collected from individuals and invested on their behalf in varied portfolios of stocks.

New Deal: U.S. economic reform programs of the 1930s established to help lift the United States out of the Great Depression.

Nontariff barrier: Government measures, such as import monitoring systems and variable levies, other than tariffs that restrict imports or that have the potential for restricting international trade.

Productivity: The ratio of output (goods and services) produced per unit of input (productive resources) over some period of time.

Protectionism: The deliberate use or encouragement of restrictions on imports to enable relatively inefficient domestic producers to compete successfully with foreign producers.

Purchasing power parity: A conversion rate into a common currency that equalizes the purchasing power of different currencies.

Recession: A significant decline in general economic activity extending over a period of time.

Regulation: The formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of a certain industry or activity.

Revenue: Payments received by businesses from selling goods and services.

Securities: Paper certificates (definitive securities) or electronic records (book-entry securities) evidencing ownership of equity (stocks) or debt obligations (bonds).

Securities and Exchange Commission: An independent, non-partisan, quasi-judicial regulatory agency with responsibility for administering the federal securities laws. The purpose of these laws is to protect investors and to ensure that they have access to disclosure of all material information concerning publicly traded securities.

Services: Economic activities — such as transportation, banking, insurance, tourism, telecommunications, advertising, entertainment, data processing, and consulting — that normally are consumed as they are produced, as contrasted with economic goods, which are more tangible.

Socialism: An economic system in which the basic means of production are primarily owned and controlled collectively, usually by government under some system of central planning.

Social regulation: Government-imposed restrictions designed to discourage or prohibit harmful corporate behavior (such as polluting the environment or putting workers in dangerous work situations) or to encourage behavior deemed socially desirable.

Social Security: A U.S. government pension program that provides benefits to retirees based on their own and their employers' contributions to the program while they were working.

Stagflation: An economic condition of both continuing inflation and stagnant business activity.

Stock: Ownership shares in the assets of a corporation.

Stock exchange: An organized market for the buying and selling of stocks and bonds.

Subsidy: An economic benefit, direct or indirect, granted by a government to domestic producers of goods or services, often to strengthen their competitive position against foreign companies.

Supply: A schedule of how much producers are willing and able to sell at all possible prices during some time period.

Tariff: A duty levied on goods transported from one customs area to another either for protective or revenue purposes.

Trade deficit: The amount by which a country's imports exceed its exports.

Trade surplus: The amount by which a country's exports exceed its imports.