The stock market is one of the most basic structures in economics. It is a term often used to generically refer to the buying and selling of equities by investors. More specifically, it sometimes refers to the place, or exchange, where these transactions take place. The most famous of the exchanges is the New York Stock Exchange (NYSE), but other stock exchanges exist as well.
The stock market is sometimes seen as an indicator of the direction an economy is heading. For this reason, the stock markets are collectively referred to as being among important "leading indicators" because they reflect new economic trends. How well or poorly the market is performing is often reflected in an index like the Dow Jones Industrial Average.
Inflation is a term that is often discussed in economic circles and is also one that regularly makes the news. In short, inflation refers to the rise in the prices of goods and services across the entire economic spectrum. It can refer to the rise in price of particular products, but it can also refer to wages and assets. "The Economist" magazine notes that since 1930, inflation has steadily caused prices to rise. Prior to 1930, falling prices, or deflation, were another major economic concern, internationally. One of the more important questions in economics concerning inflation is whether prices will rise too fast in relation to wages. If the rise in prices outpaces the rise in wages, it can become difficult for consumers to pay for life's necessities.
Market systems are another basic topic in economics. The Library of Economics and Liberty notes six different economic terms often used in discussions of systems: capitalism, free market, socialism, communism, fascism and Marxism. Capitalism is the system based on the free market concept of allowing supply and demand to determine the prices of goods and services. In capitalism, the market is driven by these underlying forces.
In socialism or its more extreme form, communism, the government is usually in control of the market. This includes the types of goods and services that are produced and what prices they will have. Socialism and communism stem from Marxism, an ideology associated with 19th-century political philosopher Karl Marx and his associate Friedrich Engels. Their view of economics saw capitalism as "evil" in the sense that competition among different classes created economic disparity between rich and poor. The topic of debate in economic circles often revolves around which of these systems is best.