Vocabulary Worksheet — Intro

Economy & Finance

C1 inflation • recession • deficit • surplus • interest rate • subsidy…
Key Vocabulary
Word Meaning Example sentence
inflation n. a general rise in prices Inflation reduced household spending power.
recession n. a period when the economy becomes weaker The country entered a recession.
deficit n. the amount by which spending is higher than income The government reported a large deficit.
surplus n. the amount left when income is higher than spending The company has a cash surplus.
interest rate n. the percentage charged or paid for borrowing money The central bank raised the interest rate.
subsidy n. money paid by a government to support something The subsidy helped farmers survive the drought.
tariff n. a tax on imported or exported goods The new tariff increased prices.
forecast n./v. a prediction about future conditions The forecast suggests slower growth.
investment n. money put into something to make a profit or benefit Investment in technology increased.
liquidity n. how easily assets can be turned into cash The bank needs enough liquidity.
volatility n. frequent and unpredictable change Volatility made investors nervous.
inequality n. an unfair difference between groups in society Income inequality has become a major issue.
Common Collocations
inflation: high inflation, inflation rate
recession: deep recession, avoid recession
deficit: budget deficit, trade deficit
surplus: budget surplus, trade surplus
interest rate: low interest rate, interest rate rise
subsidy: government subsidy, energy subsidy
tariff: trade tariff, import tariff
forecast: economic forecast, weather forecast
investment: foreign investment, long-term investment
liquidity: market liquidity, liquidity risk
volatility: market volatility, high volatility
inequality: social inequality, reduce inequality
Language Tips
Economic indicators

Inflation measures rising prices. A recession is a period of economic decline.

A forecast is a prediction based on current information.

Policy and markets

An interest rate influences borrowing and saving. A subsidy supports an activity financially.

Volatility means prices or conditions change quickly and unpredictably.