No matter how old you are, you鈥檙e part of the economy, but it can be tricky to understand what the economy actually is. Plus, what are taxes? What鈥檚 inflation? What are tariffs and why have they been in the news so much in 2025? In this episode, we break down economic terms and concepts with business reporter Stacey Vanek Smith.
Download our learning guides: | |
- The economy is the ecosystem of all the ways resources are used to make goods and services, and all the ways those goods and services are bought and sold.
- There are lots of ways to think about the economy around you. People can think about the economy globally or they can think about a state鈥檚 economy or an even smaller region like a county or town.
- We鈥檝e been hearing a lot about inflation lately. Inflation is the increase in the price of goods and services over time, and how fast prices are rising. Inflation can be good because it helps keep the economy growing. But if prices rise faster than wages, it can be bad, because people can鈥檛 afford basic necessities.
- The stock market is a trading system where people buy and sell small ownership stakes in various companies. Those fractional pieces of a company are called shares. If the price of their shares rise, investors can sell them for more money than they purchased them for.
- Many people pay attention to the stock market because it鈥檚 a sign of the health of our economy.
- Taxes are money that people pay to the government to support public programs. Federal taxes are taxes people pay to the country-wide government, but states and even towns can also put taxes on things people buy (sales tax), their houses (property tax), and the money they make in their jobs (income tax). We pay taxes so the government can do things for the general good, like maintain roads and bridges or offer public schooling.
- A tariff is a tax one government puts on goods that are sold in their country but made in a different one, also called imported goods.
- Politicians use tariffs to make sure goods that are made within their country have an advantage.
- But tariffs can also be used to address other things the countries and their governments are trying to do. They鈥檙e kind of like political bargaining chips.
Resources
