Economics and Finance

The words you meet in financial news, central bank statements and economic analysis. At C2, understanding these terms precisely lets you follow — and join — discussions about inflation, markets and policy without losing the nuance.

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Word List

Word	Phonetic	Part of Speech	Definition	Example
fiscal	/ˈfɪskl/	adjective	Relating to government revenue, especially taxes, and public spending	The government announced a fiscal stimulus of tax cuts and infrastructure spending.
monetary	/ˈmʌnɪtri/	adjective	Relating to money supply and interest rates, usually controlled by a central bank	Monetary policy was tightened as the central bank raised interest rates three times.
stagnation	/stæɡˈneɪʃn/	noun	A prolonged period of little or no economic growth	A decade of wage stagnation left many households worse off than their parents.
volatility	/ˌvɒləˈtɪləti/	noun	The tendency to change rapidly and unpredictably, especially in prices	Investors moved into bonds to avoid the volatility of the stock market.
austerity	/ɒˈsterəti/	noun	A policy of sharp cuts in public spending to reduce government debt	Years of austerity left public services underfunded and understaffed.
liquidity	/lɪˈkwɪdəti/	noun	The availability of cash, or how easily an asset can be turned into cash	The firm was profitable on paper but ran into a liquidity crisis when clients paid late.
solvent	/ˈsɒlvənt/	adjective	Having enough assets to pay all debts	The emergency loan kept the airline solvent through the winter.
speculative	/ˈspekjələtɪv/	adjective	Based on guesses about future price changes, with high risk, in the hope of quick profit	Much of the housing boom was driven by speculative buying rather than genuine demand.
downturn	/ˈdaʊntɜːn/	noun	A decline in economic or business activity	Luxury brands were the first to feel the effects of the downturn.
deficit	/ˈdefɪsɪt/	noun	The amount by which spending exceeds income in a given period	The budget deficit widened as tax revenues fell during the recession.
disposable income	/dɪˌspəʊzəbl ˈɪnkʌm/	noun	The money a household has left to spend or save after taxes	Rising rents have eaten into the disposable income of young workers.
inflationary	/ɪnˈfleɪʃənri/	adjective	Causing or tending to cause a general rise in prices	Economists warned that the wage settlement could prove inflationary.
subsidy	/ˈsʌbsədi/	noun	Money paid by a government to reduce costs or keep prices low	Farm subsidies keep food prices low but distort international trade.
equity	/ˈekwəti/	noun	Ownership value in a company or property after debts are subtracted; also, fairness	After ten years of mortgage payments, they had built up considerable equity in their home.
bubble	/ˈbʌbl/	noun	A situation where asset prices rise far above their real value, usually followed by a sharp fall	Few analysts recognized the tech bubble until it burst.
headline figure	/ˈhedlaɪn ˈfɪɡə(r)/	noun	The main, most widely reported number, often before adjustments	The headline figure showed inflation falling, but core prices were still rising.

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