IELTS Vocabulary: Economics and Finance
IELTS vocabulary for discussing economic trends, trade, and financial systems.
15 words — Band 6 to Band 8+
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Band 6Band 6 Vocabulary
inflation
A general increase in prices
“Rising inflation erodes purchasing power.”
recession
A period of economic decline
“The country entered a recession during the pandemic.”
commodity
A raw material or agricultural product
“Oil is the most traded commodity globally.”
Band 7Band 7 Vocabulary
GDP
Gross Domestic Product; total value of goods produced
“GDP growth slowed in the final quarter.”
subsidy
Financial assistance from the government
“Agricultural subsidies support farmers during difficult years.”
tariff
A tax on imported goods
“New tariffs were imposed on steel imports.”
fiscal
Relating to government revenue and spending
“Fiscal policy plays a key role in economic stability.”
monetary
Relating to money or currency
“The central bank adjusted monetary policy to control inflation.”
deficit
An excess of expenditure over income
“The budget deficit widened due to increased spending.”
austerity
Strict economic measures to reduce spending
“Austerity measures led to cuts in public services.”
Band 8+Band 8+ Vocabulary
macroeconomic
Relating to the economy as a whole
“Macroeconomic indicators suggest a recovery is underway.”
liquidity
The availability of cash in a market
“The central bank injected liquidity to stabilize markets.”
amortization
Spreading payments over multiple periods
“The loan amortization schedule spans 25 years.”
depreciation
A decrease in value over time
“Currency depreciation makes exports more competitive.”
quantitative easing
Central bank buying assets to increase money supply
“Quantitative easing was used to stimulate the economy.”
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