Economics

33 ideas, each explained on one page with a 60-second lesson you can play right there.

Anchoring effect The anchoring effect is a bias where people rely too heavily on an initial reference number when estimating values or making financial decisions.
Attention Economy When information becomes abundant, human attention becomes the scarce resource that platforms and advertisers compete to capture.
Auction An auction is a process of buying or selling goods and services through bids, which are offers of a specific price or terms.
Availability heuristic The availability heuristic makes people judge how common or severe an event is by how easily examples come to mind.
Compound Interest Compound interest adds earned interest back to your starting principal, causing savings and debts to grow faster over time.
Conspicuous consumption Conspicuous consumption is buying expensive goods or services beyond practical need to publicly display wealth, income, and social status.
Deficit spending Deficit spending is the amount by which spending exceeds revenue over a specific period, usually a single fiscal year.
Dollar-cost averaging Dollar-cost averaging invests a fixed sum on a set schedule, automatically buying more units when prices fall and fewer when they rise.
Escalation of commitment Why people double down on failing projects to protect their own past choices, violating standard cost-benefit reasoning.
Framing Effect The framing effect makes people pick different options based on whether identical outcomes are presented as gains or losses.
Gambling Gambling is the wagering of money or something else of value on a random event with the intention of winning a prize.
Hedonic treadmill Learn what the hedonic treadmill is, how psychological adaptation restores our happiness set point, and why big life events rarely change our mood forever.
Implementation intention An implementation intention is a self-regulation strategy that uses an if-then sentence to link a specific future cue to an exact behavior.
Index Fund An index fund mirrors a published market list instead of picking stocks, cutting fees and reliably outperforming most active managers over time.
Inflation Inflation is a general rise in the average price of goods and services across an entire economy.
Lifestyle creep Lifestyle creep occurs when higher income leads to higher spending at the same rate, turning optional luxuries into perceived daily necessities.
Loss Aversion Loss aversion is a cognitive bias where losing something hurts more than gaining the exact same thing feels good.
Market liquidity Market liquidity is a market feature that lets you buy or sell an asset quickly without forcing a major change in its price.
Maturity (finance) Maturity is the exact date when a loan, bond, or other debt must be fully repaid to the lender.
Mental accounting Mental accounting explains how people separate identical money into subjective buckets, changing how they spend and evaluate financial decisions.
National debt of the United States The cumulative money borrowed by the US government to cover budget deficits, tracked as outstanding Treasury securities.
Net worth Net worth is the total value of everything you own minus everything you owe.
Open market operation An open market operation is the buying or selling of government bonds by a central bank to manage interest rates and liquidity.
Overconfidence Bias Overconfidence bias is a mental blind spot where a person's certainty in their own judgment reliably exceeds its actual accuracy.
Parkinson's law Parkinson's law states that work expands so as to fill the time available for its completion.
Planning fallacy The planning fallacy causes people to underestimate the time, costs, and risks of their own future tasks while overestimating the benefits.
Prospect theory Prospect theory is an economic theory describing how real people make decisions involving risk and uncertainty.
Scarcity (social psychology) Scarcity causes people to place higher value on limited items, driving panic buying, impulse purchases, and biased decisions.
Sunk cost A sunk cost is money, time, or effort that has already been spent and cannot be recovered by any future choice.
Survivorship Bias Survivorship bias occurs when we evaluate only surviving entities and overlook failures, leading to false conclusions and inflated success rates.
United States Treasury security United States Treasury securities are debt instruments issued by the government and used as cash equivalents worldwide.
Yield curve A yield curve is a line graph that compares the interest rates of bonds from the same issuer across different lengths of time.
Yield to maturity Yield to maturity calculates the total annual return on a bond held to the end, factoring in its market price, regular payments, and face value.