Vocabulary
amortization Noun
/əˌmɔːr.t̬əˈzeɪ.ʃən/
The process of gradually paying off a debt through regular payments over time
The bank explained that with amortization, most of her early mortgage payments would go toward interest rather than the loan principal.
arbitrage Noun
/ˈɑːr.bɪ.trɑːʒ/
The practice of buying and selling the same asset in different markets to profit from price differences
The trader made money through arbitrage by buying gold in London and selling it in New York at a higher price.
austerity Noun
/ɔːˈster.ə.t̬i/
Government policies that reduce spending and increase taxes to control debt
The government's austerity measures included cutting education funding and raising income taxes.
deadweight loss Noun
/ˈded.weɪt lɔːs/
Economic efficiency lost when supply and demand are not in balance, often due to taxes or regulations
The high tax on cigarettes created deadweight loss as fewer people bought them and tax revenue was lower than expected.
depreciation Noun
/dɪˌpriː.ʃiˈeɪ.ʃən/
A decrease in the value of something over time
The car's depreciation was so rapid that it lost half its value in just two years.
derivative Noun
/dɪˈrɪv.ə.t̬ɪv/
A financial contract whose value depends on the price of another asset
He bought a derivative that would increase in value if oil prices went up.
elasticity Noun
/ɪˌlæs.ˈtɪs.ə.t̬i/
How much the demand for a product changes when its price changes
Gasoline has low elasticity because people still need to drive even when prices go up.
hyperinflation Noun
/ˌhaɪ.pər.ɪnˈfleɪ.ʃən/
Extremely rapid and uncontrolled increase in prices that makes money almost worthless
During hyperinflation, people needed wheelbarrows full of money just to buy bread.
leverage Noun
/ˈlev.ər.ɪdʒ/
Using borrowed money to make investments in order to potentially earn higher returns
The company used leverage to buy the building, putting down only 20% and borrowing the rest.
liquidity Noun
/lɪˈkwɪd.ə.t̬i/
How easily an asset can be converted into cash without losing value
Stocks have high liquidity because you can sell them quickly, but real estate has low liquidity.
monopoly Noun
/məˈnɑː.pə.li/
A situation where one company controls the entire market for a particular product or service
The company had a monopoly on internet service in the town, so residents had no other options.
moral hazard Noun
/ˈmɔːr.əl ˈhæz.ərd/
A situation where people take bigger risks because they know someone else will pay if things go wrong
Bank deposit insurance creates moral hazard because people don't worry about choosing safe banks since the government protects their money.
nationalization Noun
/ˌnæʃ.ən.əl.əˈzeɪ.ʃən/
The process of a government taking control of private companies or industries
The nationalization of the oil industry meant that the government now owned all the oil companies.
oligopoly Noun
/ˌɑː.lɪˈɡɑː.pə.li/
A market situation where only a few large companies control most of the sales
The airline industry is an oligopoly because just four major companies handle most flights.
privatization Noun
/ˌpraɪ.və.t̬əˈzeɪ.ʃən/
The process of transferring government-owned businesses to private ownership
The privatization of the postal service allowed private companies to compete in mail delivery.
solvency Noun
/ˈsɑːl.vən.si/
The ability of a person or company to pay their debts when they are due
The bank questioned the company's solvency after seeing their high debt and low income.
speculation Noun
/ˌspek.jəˈleɪ.ʃən/
Buying and selling assets hoping to make quick profits, often with high risk
His speculation in cryptocurrency paid off when Bitcoin prices doubled, but he could have lost everything.
stagflation Noun
/stæɡˈfleɪ.ʃən/
An economic situation where inflation and unemployment are both high at the same time
The country experienced stagflation in the 1970s when prices rose rapidly while many people lost their jobs.
subsidy Noun
/ˈsʌb.sɪ.di/
Money given by the government to help reduce the cost of producing goods or services
The government provided a subsidy to farmers to help keep food prices affordable for consumers.
tariff Noun
/ˈtær.ɪf/
A tax placed on goods imported from other countries
The new tariff on steel imports made foreign steel more expensive than domestic steel.
Flashcards Multiple Choice
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Complete each sentence with the correct word from the word bank.

Vocabulary Matching

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# Ans. Word Definition
Complete the Sentences

Use the vocabulary words to complete the sentences below. You may change the tense of the word, change it from singular to plural, and add prepositions or other connectors as needed for grammatical accuracy. Sentences with one blank must use a vocabulary word in the blank. Sometimes multiple vocabulary options may be correct. Sentences with two blanks must include a vocabulary word in one of the blanks, but you may use whatever words you want in the other blank.

Word Bank
  • amortization
  • arbitrage
  • austerity
  • deadweight loss
  • depreciation
  • derivative
  • elasticity
  • hyperinflation
  • leverage
  • liquidity
  • monopoly
  • moral hazard
  • nationalization
  • oligopoly
  • privatization
  • solvency
  • speculation
  • stagflation
  • subsidy
  • tariff
Synonyms

Synonyms are word pairs whose meanings are the same or nearly the same. Big and large are synonyms. From each group of four words below, click the two that are synonyms.

Vocabulary in Context