Chapters 10-12 Flashcards
an established system of political administration by which a nation, state, society, or organization is ruled
government
the two primary aims of a government
reward good
punish evil
an economic system based upon collective ownership and control of national resources
socialism
five government practices that have harmed economic systems over centuries
excessive taxation
inflation and debasement of money
excessive public expenditure
excessive regulation and direction of the economy
political plundering of the economy
large, complex organizations made up of appointed officials and their numerous agencies and departments
bureaucracies
federal program implemented by Franklin Roosevelt during the Great Depression to relieve money of the gold standard and attempt to provide economic stability
New Deal
founder of the Keynesian school of economics
John Maynard Keynes
based on the belief that a society’s economic problems can be better solved by “expert planners” than by the natural, automatic corrections made by a free market
Keynesianism
recurrent fluctuations in the level of economic activity
business cycle
the part of the business cycle in which the economy is growing; characterized by an increase in GDP and low unemployment rates; also known as the boom
expansion
the value of all finished goods and services produced within a country during a year’s time
gross domestic product (GDP)
the value of all finished goods and services produced by a nation’s citizens during a year’s time
gross national product (GNP)
the high point of a business cycle, where activity is at its highest
peak
a period of economic decline
recession
the lowest point in a business cycle
trough
components of the economy that normally change before the rest of the economy
leading indicators
inflation that is caused when the demand becomes greater than the supply, resulting in shortages
demand-pull inflation
inflation that is triggered when businesses face rising production costs, forcing them to increase the prices they charge for their goods
cost-push inflation
a tool used to measure the growth of inflation, based on the average price consumers pay for specific goods and services; prices are compared to a base period arbitrarily valued at 100 percent
consumer price index (CPI)
period that serves as a reference point to which prices are compared in the CPI (arbitrarily given the value of 100 percent)
base period
the economic condition in which high inflation is combined with high unemployment, resulting in stagnation of productivity
stagflation
the theory that reduction of taxes makes more money available for private investment in capital and research, thereby increasing productivity
supply-side economics
the year of the Bolshevik Revolution
1917
the promotion of one’s own nation and government regardless of moral considerations
nationalism
