To build your social science analogy muscles, make sure you’re familiar with the main people, terms, and events in economics. For the MAT, it helps to know first that economics deals with the study of how people provide goods and services to one another.

Here you’ll find the basic economics terms you need to know, along with some key economics figures, to give you a working knowledge of what the MAT may test.

Economics terms that appear on the MAT test

Brush up on your knowledge of economics by studying these terms and their definitions.

  • Bankruptcy: The legal status of a debtor who cannot pay his debts

  • Capitalism: Private ownership–based economic system

  • Communism: Economic system in which the people control the means of production

  • Consumer Price Index (CPI): Measure of changes in the prices of consumer goods

  • Credit: Acquiring a good or service and paying for it later

  • Debt: Money owed

  • Depression: A severe, long-term recession

  • Expansion: Period of increased economic activity

  • Federal Deposit Insurance Corporation (FDIC): Guarantees the security of deposits in banks

  • Federal Reserve Board of Governors: Group that oversees the central banking system of the United States

  • Federal Trade Commission (FTC): Protects consumers by opposing anticompetitive business methods

  • Gift economy: A culture in which goods are given without an agreement for reciprocation

  • Gross National Product (GNP): Value of products and services produced by a country in a year

  • Heterodox economics: Economic schools of thought that are not mainstream

  • Inflation: The rise of prices over time

  • Interest: A fee paid to borrow money, expressed as a percentage of the money borrowed

  • Labor union: Group of workers united to achieve common goals that would better their conditions of employment, known as a “trade union” in British English

  • Market: System in which parties exchange with each other

  • Mass production: Creating great amounts of products on assembly lines

  • Monopoly: A single entity is the only supplier of a specific good or service

  • Protectionism: Government regulating trade between countries to promote domestic trade

  • Recession: Period of a slowdown of economic activity

  • Socialism: Social ownership–based political system

  • Old-Age, Survivors, and Disability Insurance (OASDI): Federal program. The original Social Security Act (1935) and the current version of the act, as amended, encompass several social welfare and social insurance programs

  • Subsidy: Money paid by a government to a business or industry to help it or to encourage specific behavior

  • Supply and demand: Model for determining prices of goods in a competitive market

Important figures in the field of economics

The following lists important people in the field of economics that you should know before taking the MAT.

  • Friedman, Milton: American economist who won the Nobel Prize

  • Greenspan, Alan: American economist who served as Chairman of the Federal Reserve

  • Keynes, John Maynard: British economist who contributed to modern macroeconomics

  • Krugman, Paul: American economist who won the Nobel Memorial Prize

  • Malthus, Thomas: English political economist who theorized about population growth and decline

  • Marx, Karl: German economist who first created the principles of communism

  • Smith, Adam: Scottish economist who wrote The Wealth of Nations

About This Article

This article is from the book:

About the book authors:

Vince Kotchian is a full-time standardized test tutor specializing in the MAT, SSAT, ISEE, ACT, GRE, and GMAT. He teaches a GRE prep course at the University of California, San Diego, and has an extensive understanding of analogies and the MAT.

Edwin Kotchian is a MAT tutor and freelance writer who has contributed to a variety of test-prep material.

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