Midterm

Question 1

Invisible Hand

Answer 1

Adam Smith, c. 1750s, The “unseen” Direction of the market to which is most agreeable to the interest of the whole society.

Question 2

Law of Accumulation

Answer 2

Adam Smith, c. 1750s, The idea that the accumulation of profit leads to greater investment in technologies such as machinery which leads to capital flow

Question 3

Law of Population

Answer 3

Adam Smith, c. 1750s, An increase in employment will lead to an increase in birthrate which eventually leads to lower wages and a decline in birthrate

Question 4

Division of Labor

Answer 4

Adam Smith c. 1750s, A greater efficiency in production by way of specialization, as opposed to an individual effort. Pin-Factory Example

Question 5

Dialectical Materialism

Answer 5

Karl Marx, c. 1850s, The idea of inherent change in physical and material realities.

Question 6

Base

Answer 6

Karl Marx c. 1850s The reality that humans must organize to clothe, feed and house themselves

Question 7

Superstructure

Answer 7

Karl Marx. c. 1850s The system of laws, religion, and philosophy which reflect the foundation of society.

Question 8

Class

Answer 8

Karl Marx c. 1850s groups of individuals who stand in relation to forms of production. Can rise up or fall.

Question 9

Unearned Increment

Answer 9

Karl Marx c. 1850s The process of an employer profiting off the the unpaid labor of a worker. Laborer works for 10 hours but only gets pair for 6 hours

Question 10

Labor theory of Value

Answer 10

Karl Marx c. 1850s, The identification of a kind of social system in which labor-power becomes a commodity

Question 11

Paradox of Thrift

Answer 11

John Maynard Keynes c. 1920s The idea that the economy stagnates when people save their money instead of investing it.

Question 12

Spiral of Contraction

Answer 12

John Maynard Keynes c. 1920s When savings do not become invested by expanding business firms, incomes will decline. An elevator could move up or down or stand still.

Question 13

Wants v. Demands

Answer 13

John Maynard Keynes c. 1920s Wants are as large as dreams, demands are small like a pocketbook

Question 14

Priming the Pump

Answer 14

John Maynard Keynes c. 1920s The act of government spending to serve as a stimulus to bolster the nation’s buying power.

Question 15

Entrepreneurs

Answer 15

Joseph Schumpter c. 1940s The innovator who is responsible for combining the factors of production in new ways.

Question 16

Business Cycles

Answer 16

Joseph Schumpter c. 1940s 3 types: Short Term, Mid Term 7-11 years, 50+years with the rise of technological advance.

Question 17

Creative Destruction

Answer 17

Joseph Schumpter c. 1940s The idea of one product innovating then many other products imitate the first one leading to market stagnation until a new innovation. (Apple vs Samsung)

Question 18

Feudalism

Answer 18

9th-15th Century Europe, The pledging fealty to a lord for protection in exchange for labor and a share of produce. Promoted hoarding to sell high when the market sucked.

Question 19

Wampum

Answer 19

c. 1640s, Shells used as a form of currency by the Wampanoga Native Americans. Monetized by the Dutch

Dutch market failed because of a lack of fur trade by the Wampanogas. Resulted in a change of power in the Plymouth areas.

Question 20

Usury

Answer 20

Act of lending money at high rates of interest.

Question 21

Andrew Carnegie Gospel of Wealth

Answer 21

c. 1890s Scottish Immigrant who became rich with his work in the Steel Industry. Published the Gospel of Wealth claiming that it’s the rich’s responsibility to provide for the poor.

Question 22

Eugene V. Debs

Answer 22

c. 1900s, American Socialist, criticized Carnegie’s Gospel of Wealth, ran for president in 1904 while incarcerated.