The first coin invented as a method of payment in 500 B.C.
2) Debasement
Lowering the value of a currency either by removing gold or silver or by printing too much paper money
3) Gold Standard
Monetary system whereby a currency’s value is fixed to a specific weight of gold; for example, the dollar was once fixed at a ratio of $35 to an ounce of gold.
4) Mercantilism
The ideology dominant in Europe in the 15th through 17th centuries. It held that a nation’s power and wealth was achieved through accumulating piles of silver and gold. This mean encouraging exports and discouraging imports. Trade was seen as a form of economic warfare rather than a creator of wealth.
5) Hyperinflation
An extremely rapid fall in the value of a currency, manifested by prices rising more than 50 percent a month.
6) Macroeconomics
Study of the overall economy and major factors affecting it such as taxation and monetary policy.
7) Microeconomics
Study of a particular sector of the economy, e.g., the auto industry.
8) Procyclical
Economic policies that amplify an existing business trend, such as reducing interest rates when the economy is booming.
9) Countercyclical
Policies that work against an existing business trend, such as cutting taxes when the economy is depressed.
10) Beggar-Thy-Neighbor
Policies, such as a currency devaluation, that supposedly give short-term help to one nation’s economy at the expense of other nations.
11) Recession
When an economy contracts for longer than six months.
12) Stagflation
The damaging combination of inflation and slow or no economic growth. Inflation + stagnation = Stagflation
13) Subprime lending
Loans to high-risk borrowers.
14) Quantitative Easing
The name given to the Federal Reserve’s massive buying of Treasury and mortgage securities to increase the money supply and suppress interest rates.
15) Floating currency
A currency whose value is not fixed either to another currency or to gold.
16) Cryptocurrency
Digital currencies such as bitcoin.
