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Flashcards in Chapter 4 - Political Economy Deck (27):
1

Political Economy

Study of how Economics and Politics are related and shape the between freedom and equality.

2

Markets

Interactions between the forces of supply and demand. Allocation of resources through these forces interacting. These forces create values for goods and services.

3

Property

Ownership of goods and services exchanged through markets. Land, buildings, businesses, or personal items.

4

Public Goods

Defined as good provided or secured by the state. Provided for society and indivisible.

5

Social Expenditures

State's provision of public benefits such as education, health care, and transportation. Known as welfare, or the welfare state.

6

Gross Domestic Product

Total market value of goods and services produced by one country in a year.

7

Money

Medium of exchange. Not necessarily equivalent to wealth. States create money such that value can be transferred. Only a tiny fraction of wealth in the world.

8

Wealth

How much one owns in overall value in property that has value.

9

Central Bank

Controls how much money flows through the economy and how much it costs to borrow money.

10

Inflation

Defined as an increase in overall prices in the economy when demand outstrips supply. Wages and savings lose value. Higher wages and benefits are demanded to offset.

11

Deflation

Decrease in overall prices in the economy when supply outstrips demand. Businesses cannot make money.

12

Hyperinflation

Inflation higher than 50% a month for more than 2 months in a row. States print tons of money.

13

Regulation

Rules or orders that set the boundaries of a given procedure. Economic - Control prices, control what firms may operate in certain markets. Social - focus on how businesses function in the market.

14

Quotas

Limit quantity of good coming into a country

15

Monopoly

A market controlled by a single producer

16

Tariff

tax on imported goods

17

Non-tariff regulatory barriers

Health, packaging, or other restrictions to protect citizens and make it difficult or expensive to sell foreign goods in domestic market.

18

Comparative Advantage

The ability to produce a certain good more efficiently than other countries.

19

Political-economic system

4 of them. Relationship between political and economic institutions in a particular country, as well as the policies and outcomes they create.

20

Liberalism

Focus on Laissez-faire and capitalism. Small government. Individual freedom.

21

Social Democracy

Wealth redistribution. Wide array of public goods should be provided by the state. Social democracy should own some sectors of economy.

22

Neocorporatism

A system of policy making involving the state, labor, and businesses.

23

Communism

Complete control of the market. Assign jobs and produces goods. Provides everything. Collective equality.

24

Mercantilism

No focus on liberty and equality. Emphasis on furthering the state. National economic power and domestic economy important to generating power for the state.

25

Purchasing Power Parity

Estimation of buying power in each country.

26

Gini index

Mathematical formula that measures the amount of economic inequality in a society.

27

Human Development Index

Overall wealth, distribution of wealth, income, health, and educational indicators.