chapter 4: political economy Flashcards
(25 cards)
political economy
the study of the interaction between states and markets
market
the interaction between the forces of supply and demand that allocates resources
property
goods or services that are owned by an individual or a group privately or publicly
public goods
goods, provided or secured by state, available to society, and which no private person or organization can own
social expenditures
state’s provision of public benefits, such as education, transportation and health care (welfare), usually paid for by tax
gross domestic product (GDP)
the total market value of goods and services produced by a country in a over a period of one year
central bank
that state institution that controls how much money is flowing through the economy as well as how much it costs to borrow money in that economy
(lowers interest rate to stimulate economy, raises interest rates to check inflation)
inflation
an outstripping of supply by demand, resulting in an increase in the general price level of goods and services and a consequent loss of value in a country’s currency
hyperinflation
inflation of more than 50 percent a month for two months in a row
deflation
a period of falling prices and values for goods, services, investments, and wages
regulation
a rule or an order that sets the boundaries of a given procedure
monopoly
a single producer that is able to dominate the market for a good or a service without effective competition
tariffs
a tax on imported goods
quotas
a non-tariff that limits the quantity of a good that may be imported into a country
non-tariff regulatory barriers
policies and regulations used to limit imports through methods other than taxation
comparative advantage
the ability of one country to produce a particular good or service relatively more efficiently than other countries’ efficiency in producing the same good or service
political-economy system
the relationship between political and economic institutions in a particular country, and the policies and outcomes they create
laissez-faire
the principle that the economy should be “allowed to” do what it wishes, a liberal system of minimal state interference in the economy
capitalism
a system of production based on private property and free markets
mercantilism
a political-economic system in which national economic power is paramount and the domestic economy is viewed as an instrument that exists primarily to serve the needs of the state
parastatals
industry partially owned by the state
purchasing power parity (PPP)
a statistical tool that attempts to estimate the buying power across different countries by using prices in the United States as a benchmark
gini index
a statistical tool that measures the amount of economic inequality in a society; its scale ranges from zero to one hundred, where zero corresponds with perfect equality, and one hundred to perfect inequality
human development index (HDI)
a statistical tool that attempts to attempts to evaluate the overall wealth, health and knowledge of a country’s people
