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Terms in Important Definitions

This list contains important definitions in areas of economics and politics which are mentioned in this website and are crucial to understanding the site's content.


  • Capitalism (6)

    an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market. (Webster’s dictionary)

  • Cartel (1)

    A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members. (

  • Collectivism (9)

    The principles or system of ownership and control of the means of production and distribution by the people collectively, usually under the supervision of a government. (

  • Communism (1)

    a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party. (


  • Democracy (2)

    1. Government by the people, exercised either directly or through elected representatives.

    2. A political or social unit that has such a government.

    3. The common people, considered as the primary source of political power.

    4. Majority rule.

    5. The principles of social equality and respect for the individual within a community.


  • Depression

    Economic depression is lowest point in an economic cycle characterized by (1) reduced purchasing power, (2) mass unemployment, (3) excess of supply over demand, (4) falling prices, or prices rising slower than usual, (5) falling wages, or wages rising slower than usual, and (6) general lack of confidence in the future. Also called a slump, a depression causes a drop in all economic activity. Major depressions may continue for several years, such as the great depression (1930-40) that had worldwide impact. (


  • Fascism

    A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism. (

  • Free Market (7)

    an economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies. (


  • Group (2)

    a number of individuals assembled together or having some unifying relationship. (Webster’s dictionary)


  • Individual (3)

    a single organism as distinguished from a group. (Webster’s dictionary)

  • Individualism (9)

    1. Belief in the primary importance of the individual and in the virtues of self-reliance and personal independence.

    2. A doctrine advocating freedom from government regulation in the pursuit of a person's economic goals.

    3. A doctrine holding that the interests of the individual should take precedence over the interests of the state or social group.


  • Inflation (1)

    Inflation is an increase in the quantity of money and credit. Its chief consequence is soaring prices. Therefore inflation—if we misuse the term to mean the rising prices themselves—is caused solely by printing more money. For this the government’s monetary policies are entirely responsible.

    The most frequent reason for printing more money is the existence of an unbalanced budget. Unbalanced budgets are caused by extravagant expenditures which the government is unwilling or unable to pay for by raising corresponding tax revenues. The excessive expenditures are mainly the result of government efforts to redistribute wealth and income—in short, to force the productive to support the unproductive. This erodes the working incentives of both the productive and the unproductive. (


  • Monopoly (3)

    exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. ( "Monopoly frequently ... arises from government support or from collusive agreements among individuals." (Milton Friedman)


  • objectivism (1)
  • Oligarchy

    a form of government in which all power is vested in a few persons or in a dominant class or clique; government by the few. (


  • Recession

    Period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression. (

  • Republic (3)

    A political order in which the supreme power lies in a body of citizens who are entitled to vote for officers and representatives responsible to them. (


  • Socialism (2)

    any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods. (Webster’s dictionary)

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