ECON 234 Final Flashcards
(40 cards)
Ways the size of the economy can be measured
world product or output (value added of goods and services produced), expenditures (consumption, investment, government, net exports), national incomes (wages, rent, interest, profit), demographic indicators, economic indicators
de jure vs. de facto
de jure: structures of power that are formally recognized in the law; de facto: structures of power followed in reality and in practice but are not officially sanctioned
how governments encourage positive externalities
subsidizing goods and services that benefit third parties or give spillover benefits
rent-seeking behavior
government uses resources and buys influence (e.g. through lobbying or corruption) to gain rent (e.g. profits and surplus) by reducing the welfare of others
Reasons for the growth of population and income in the West
migration through conquest or settlement, international trade or capital movements, technological or institutional innovation
Drivers of long-run economic growth
population and resources; commercialization, markets, and technology; class power and property relations; institutional change and property rights
institutions
formal and informal rules and norms that determine the way that humans engage in political, economic, and social activity
economic institutions
determine the ways and extent to which agents are able to engage in market activities, particularly rules about labor mobility and property ownership
political institutions
regulate political power in society, its limits, how its allocated between agents, how it changes hands
shirking
unproductivity or neglecting one’s responsibilities
social institutions
any rules and norms that regulate social relationships like schools; encompasses both economic and political institutions
legal institutions
rules that relate to the enforcement of contracts and rights
formal vs. informal institutions
formal: rules and norms that are codified in some formal manner like in statutes, regulations, bills, acts, etc; informal: accepted norms in society and how rules are observed in practice
private property
for a private individual, family, group, or corporate body; others excluded without the consent of those who hold the rights
common property
more than one person with rights to a resource, business, activity etc.
open access property
specific rights aren’t assigned to anyone and no one can be excluded; assumes lack of knowledge of other’s actions and inability to negotiate
regulated common property
institutions established to manage entry and exit of participants, quotas, prices, etc.
state ownership and/or control
state has exclusive rights to assign access to resources
chattel property/slavery
tangible, movable personal property that is not attached to the land
sub-infeudation
rulers granted land or “fiefs” to “vassals” like warriors, lords, and knights in exchange for service like military service
extensive vs. intensive growth
extensive: expansion in the size of the aggregate economy (labor, capital, land); intensive: increased output per capita or productivity
2 types of stock (Smith)
stock used for immediate consumption and revenue-producing stock (i.e. capital)
How does capital yield revenue?
can be used in both producing and purchasing goods to be resold with a profit, or in improving land by purchasing machines and instruments of trade
Fixed capital
machines and equipment that enhance labour productivity e.g. buildings, improvements of agricultural land, acquired and useful abilities of people
