Glossary

Barter: The direct exchange of goods and services that does not involve the use of currency (money). For example, a farmer may exchange food that she has grown for a plough produced by a metal-smith.

Basic Needs: This is the term given to goods and services that are considered necessary for all human beings. Examples of basic needs include adequate food, safe drinking water, clean air, adequate housing, basic education, basic health care.

Capital: Is the term that economists give to items of wealth that are consumed but used to produce more wealth. Economists identify two types of capital: fixed capital -the tools, equipment, machinery that are used to produce goods and services; liquid capital -money used to develop businesses that produce goods and services.

Development: Unfortunately, there is no broadly agreed upon definition of economic development. As used in this module economic development is measured by a economy’s ability to provide a basic standard of living (adequate jobs, housing, education, food, health care) for a majority of citizens.

Foreign Exchange: International currencies that are accepted in all parts of the world. The most commonly accepted international currencies are the U.S. dollar, the Japanese Yen, the Euro, and the British Pound Sterling. African countries earn foreign exchange from selling exports to other countries.

International Debt: Money owed by countries from debt they made through borrowing from international banks, other countries, or international organizations such as the World Bank.

Labor: One of the key factors of production. Used as an adjective, labor refers to the human effort used in producing goods and services. Used as a noun, labor refers to people who provide labor for the production of goods and services. Production cannot take place without labor.

Land: As used by economists, land can refer to all natural resources, including soil, to produce goods.

Underdevelopment: Underdevelopment refers to a national economy that, as a result of a disadvantaged position in the global economy, has stagnated.