Global Economy
The international exchange of goods and services that is expressed in monetary units of account.
Gross Domestic Product (GDP)
The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.
Reserve Currency
A foreign currency held in significant quantities by governments and institutions as part of their foreign exchange reserves, often used in international transactions.
Nominal GDP
Measures a country's total economic output (the value of its goods and services) using current prices, without adjusting for inflation.
Real GDP
The economic output of a country, when adjusted for price changes (inflation or deflation), provides a more accurate figure of a country's economy size and growth rate over time.
Inflation
The rate at which the general level of prices for goods and services is rising, subsequently eroding purchasing power.
Recession
A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
Interest Rates
The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, usually noted on an annual basis known as APR.
Monetary Policy
The macroeconomic policy laid down by the central bank, involving management of money supply and interest rate and aimed at achieving maximum employment, stable prices, and moderate long-term interest rates.
Federal Reserve (Fed)
The central bank of the United States, which is responsible for setting monetary policy, regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions, the U.S. government, and foreign official institutions.
Open Market Operations (OMO)
Activities by a central bank to buy or sell government bonds on the open market to expand or contract the amount of money in the banking system.
Quantitative Easing (QE)
A monetary policy wherein a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy.