Economic or Economical? Meaning and examples

What is the difference between “economic” and “economical”?

In English, confusion often arises between the words “economic” and “economical” because they sound quite similar. However, these two words have distinct meanings, even though at first glance, they might seem interchangeable.

Economic is used to describe anything related to the economy. For example, if we are discussing the economic situation of a country, we would use this word:

• “The country is facing an economic crisis.”

The field of study concerned with the economy is called economics (always in the plural). For example:

• “She is studying economics at university.”

Economical, on the other hand, means “cost-effective” or “efficient”—something that helps to save money or resources. For example:

• “This car is very economical because it uses less fuel.”

In summary, economic pertains to the economy in general, while economical refers to something that helps conserve money or resources. Let’s delve deeper into each word and their differences.

Economic — Related to the Economy

The word economic is used when discussing macro-level economic processes and phenomena. It relates to issues involving a country’s economy, financial markets, economic policy, and development. Economic means “pertaining to the economy” and is used in a broad context involving finance, business, and the overall economic system.

Meaning

Economic refers to processes that affect national or global economies, such as changes in financial markets, economic growth, or crises. It points to large-scale economic activities that impact society, businesses, or governments as a whole.

Usage

Economic is commonly used to describe global or regional phenomena that influence the economy. You’ll find it in terms relating to political decisions, global shifts, or financial market analysis.

Examples:

• “The government is introducing new economic reforms to boost growth.”
• “Global economic trends indicate a shift towards more sustainable development.”
• “Economic inequality is a major issue that many countries face today.”

Other uses:

• Economic indicators — measures used to evaluate the state of the economy, such as GDP, unemployment rates, or inflation.
  • “The country’s economic indicators show a positive trend this year.”
• Economic policy — a set of actions taken by the government to manage the economy, involving taxation, spending, or market regulation.
  • “The central bank is adjusting its economic policy to tackle inflation.”
• Economic sanctions — restrictions imposed on a country to pressure its economy, often in response to political or military actions.
  • “The international community imposed economic sanctions on the country.”

Specific terms:

• Economic growth — the increase in production of goods and services in a region or country over a certain period.
• Economic crisis — a period of severe economic downturn characterized by reduced production, rising unemployment, and financial difficulties.
• Economic policy — measures and decisions made by the government to regulate the national economy.

In short, economic refers to large, global, or national economic processes and is used to describe phenomena that affect the financial and economic stability of countries or regions on a macro level.

Economical — Cost-Effective or Efficient (Use of Resources)

The word economical means “cost-effective” or “efficient” and is used to describe rational and effective use of resources like money, time, or energy. Unlike economic, which relates to macroeconomic processes, economical is used on a micro level when referring to the efficient use of resources in everyday life or business.

Meaning

Economical describes objects or actions that help save resources, reduce costs, or avoid waste. It often refers to something being financially or energy-efficient.

Usage

Economical is commonly used to describe the behavior of people, goods, or services that help save money or use resources wisely. It’s frequently seen in contexts involving purchases, energy usage, or spending.

Examples:

• “This washing machine is very economical in terms of water usage.”
• “He tries to be economical with his spending to save for a vacation.”
• “Solar panels are considered an economical solution for reducing energy bills.”

Other uses:

• Economical car — a car that consumes little fuel and is cost-effective in the long run.
  • “This car is very economical because it only uses a small amount of fuel.”
• Economical solution — a solution that minimizes costs or resources.
  • “They found an economical solution for their energy needs by installing solar panels.”
• Economical choice — a choice that helps save money or other resources.
  • “Taking the bus is often a more economical choice than driving a car.”

Specific terms:

• Economical use of resources — efficient and rational use of available materials, money, or energy.
  • “The company emphasizes the economical use of resources in its production process.”
• Economical lifestyle — a way of living that involves frugality and efficient use of resources.
  • “Living an economical lifestyle helps to save money and reduce waste.”

In summary, economical is used to describe the efficient use of resources, from financial to natural. It relates to practical and frugal decisions that help reduce costs or conserve resources in everyday situations.

Comparison and Summary of the Differences Between “Economic” and “Economical”

The words economic and economical have distinct meanings and are used in different contexts.

Economic refers to anything related to the economy, finances, market processes, or overall economic policy. It is used when discussing large systems and processes, such as economic growth, market crises, or financial stability.

Examples:

• Economic growth — an increase in the production of goods and services in a country.
• Economic system — the structure that defines how a country organizes the production, distribution, and consumption of goods and services.
• Economic policy — government measures and actions aimed at regulating the economy.

Economical, on the other hand, means “cost-effective” or “thrifty” and is used to describe the efficient and rational use of resources such as money, time, or energy. This term is more applicable to everyday situations where it’s important to avoid waste and use resources efficiently.

Examples:

• Economical car — a car that consumes little fuel.
• Economical solution — a solution that helps reduce costs or save resources.
• Economical use of energy — thrifty use of electricity that lowers utility bills.

Key Differences:

• Economic emphasizes broad, overarching issues related to the economy at a national or regional level. It is used in a macroeconomic context.
• Economical refers to the efficient use of resources in specific, everyday situations and is appropriate for microeconomic levels.

Table with the differences between economic and economic in English

If you are referring to the economy, financial processes, or market systems, use economic. If the context is about saving money or efficiently using resources in daily life or business, the correct word is economical.