Chapter 4 Definitions Flashcards
(17 cards)
Balance of payments
trade (current accounts) and surplus/deficit (financial account)
Command Economy
government directed/mostly owned; collectivism
Market Economy
private owns most; laissez-faire; individualism
Mixed Economy
Combo command & market; most common; individualism and collectivism
Income distribution
(GINI INDEX0 dispersion of wealth in a society; US highest
Unemployment
% of people unemployed and seeking a job
Inflation
price rising faster than value of $$$. Inspires “buy now” ; danger is “spiral”
Deflation
Price dropping faster than value of $$$l; inspires “delay” ; danger is “spiral”
Inflation control
most common method is raise interest - decreases consumer credit
Interest rate affect
raise slows consumer buying (less credit); slow invest (incr. COC)
Deflation problem
“lack of tools - since interest rate already low”
Ideal Inflation
gov’t target has been 2% ; many economists believe 4% SAFER (buffer)
Misery index
combination of unemployment and inflation (the pain)
Poverty
over 80% of the global population
Socialism
gov’t directed economics; based on “contribution” - social based collectivism
Communism
extreme socialism; gov’t owns/directs all; society shares based need
State capitalism
evolving socialism approach - but 1 party system
