Terminal velocity is the constant speed an object reaches when the force of gravity pulling it down is balanced by the drag force resisting its motion through a fluid. Drag is the resistance encountered by an object moving through a fluid, such as air or water. As an object falls, it accelerates until the drag force increases to equal the gravitational force, resulting in no further acceleration. Understanding these concepts is crucial for physics exams, as they explain the dynamics of falling objects. Mastering the relationship between terminal velocity and drag is essential for comprehending motion in fluids.