Economics ch. 2 Flashcards
laws of economics
general rules or principles guiding the PDC of goods
mercantilism
an economic system that advocates the building up of the state’s treasury with the goal of accumulating as much bullion as possible; holds that a nation’s wealth lies in its stockpiles of precious metals
trade balance
the difference in value of goods that a country sells abroad compared to those it purchases from other countries
tariffs
taxes that governments apply only to imported goods
imperialism
the establishment of colonies and extensive territories created to benefit their mother countries
Physiocracy means
the rule of nature
physiocrats
a French group of economic critics known as some of the earliest advocates of laissez-faire economics
laissez-faire means
let things alone
classical economics
the theories developed by economists that stated that the free market was the best economic system
Adam Smith was the
founder of economics
Adam Smith wrote what famous book?
An Inquiry Into The Nature and Causes of the Wealth of Nations
division of labor
the separation of work into individualized tasks
specialization
the division of tasks that allowed the production of goods by people who did those jobs best
division of labor and free market
individuals are allowed to own private property and make personal choices
they are brought together as if by an
invisible hand
