Politics and Economics

Question 1

GDP (Gross Domestic Product)

Answer 1

The total value of all goods and services produced in a country in one year — a key measure of economic performance.

Question 2

Inflation

Answer 2

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Question 3

Fiscal Policy

Answer 3

Government policy related to taxation and spending to influence the economy.

Question 4

Monetary Policy

Answer 4

Central bank actions (e.g., setting interest rates) to control the money supply and influence inflation and growth.

Question 5

Supply and Demand

Answer 5

Prices are determined by the relationship between availability of goods (supply) and desire for them (demand).

Question 6

Subsidy

Answer 6

Financial assistance from the government to encourage or support certain industries or activities.

Question 7

Trade Balance

Answer 7

The difference between a country’s exports and imports.

Question 8

Tariff

Answer 8

A tax on imported goods, used to protect domestic industries or raise revenue.

Question 9

Public Sector

Answer 9

The part of the economy controlled by the government (schools, healthcare, infrastructure).

Question 10

Private Sector

Answer 10

Businesses and organizations owned by individuals, not the government.

Question 11

NGO (Non-Governmental Organization)

Answer 11

A non-profit group, independent from government, often working on social or humanitarian issues.

Question 12

Bureaucracy

Answer 12

The system of government administration and officials that carry out public policies.

Question 13

Rule of Law

Answer 13

The principle that all individuals and institutions are subject to and accountable to law.

Question 14

Sovereignty

Answer 14

The authority of a state to govern itself without outside interference.

Question 15

Globalization

Answer 15

The increasing interconnectedness of economies, cultures, and populations across the world.

Question 16

Sustainable Development

Answer 16

Economic development that meets current needs without compromising future generations’ ability to meet theirs.

Question 17

Human Rights

Answer 17

Basic rights and freedoms to which all people are entitled (freedom of speech, equality, etc.).

Question 18

Populism

Answer 18

A political approach that seeks to represent the interests of “ordinary people” against perceived elites.

Question 19

Authoritarianism

Answer 19

A political system in which power is concentrated in a leader or small elite not accountable to the public.

Question 20

Democracy

Answer 20

A system of government where power is held by the people, typically through elected representatives.

Question 22

Term

Answer 22

Definition + Example

Question 23

Venture Capital

Answer 23

Funding provided to startups and small businesses with high growth potential. Example: Many tech startups in Berlin are funded by venture capital firms.

Question 24

Liquidity

Answer 24

How easily an asset can be converted into cash without affecting its price. Example: Stocks of large companies are very liquid; real estate is less liquid.

Question 25

Corporate Social Responsibility (CSR)

Answer 25

Business practices that contribute to societal goals beyond profit (e.g., sustainability, community support). Example: Patagonia is known for its strong CSR focus on environmental issues.

Question 26

Stakeholder

Answer 26

Anyone with an interest in a company (employees, shareholders, customers, community). Example: Sustainable practices consider the interests of all stakeholders, not just shareholders.

Question 27

Oligopoly

Answer 27

A market structure dominated by a small number of firms. Example: The aviation industry is an oligopoly in many countries.

Question 28

Value Chain

Answer 28

The full range of activities that add value to a product or service. Example: Luxury brands tightly manage their value chain to maintain product quality.

Question 29

Capital Expenditure (CapEx)

Answer 29

Money spent by a company to acquire, maintain, or improve fixed assets (e.g., buildings, machinery). Example: The company’s CapEx increased due to new factory construction.

Question 30

Operating Expenditure (OpEx)

Answer 30

Ongoing costs for running a business, such as rent, salaries, utilities. Example: The factory reduced OpEx by optimizing its energy consumption.

Question 31

Depreciation

Answer 31

The reduction in value of an asset over time, often used in accounting. Example: Machines are subject to depreciation and must be recorded accordingly.

Question 32

Just-in-Time (JIT)

Answer 32

Inventory strategy to receive goods only as they are needed, reducing inventory costs. Example: The automotive plant uses JIT to avoid excess stock of parts.

Question 33

Cash Flow

Answer 33

The total amount of money being transferred into and out of a business. Example: Positive cash flow indicates that a company can meet its financial obligations.

Question 34

Break-even Point

Answer 34

The production level at which total revenues equal total costs — no profit, no loss. Example: The factory must produce 10,000 units per month to reach break-even.

Question 35

Inventory Turnover

Answer 35

A ratio showing how many times a company's inventory is sold and replaced in a period. Example: High inventory turnover suggests efficient production and sales processes.

Question 36

Total Cost of Ownership (TCO)

Answer 36

The full cost of owning an asset over its lifetime, including purchase, maintenance, and operation. Example: The TCO of a new machine was higher than expected due to maintenance costs.

Question 37

Lean Manufacturing

Answer 37

A production method focused on reducing waste and increasing efficiency. Example: The factory adopted lean manufacturing principles to cut production time.

Question 38

EBITDA

Answer 38

Earnings Before Interest, Taxes, Depreciation, and Amortization — a measure of a company’s profitability before certain deductions. Example: The company reported an EBITDA of 10 million euros last quarter.