Economic Dimensions

Question 1

Demand Side/Keynesian Economics

Answer 1

Saving in good times (hands off), and spending in bad times (intervention).
Economic policies that favour the consumer.

Question 2

Trickle-down/Supply-Side Economics

Answer 2

Cut taxes on big businesses, and the extra money can be spent on workers.
Economic policies of Reagan and Thatcher.

Question 3

Free-Market Economic Systems

Answer 3

An economy where all resources are owned by individuals.
Private ownership, freedom of choice, self-interest, buying and selling platforms, competition, and limited government intervention.

Question 4

Mixed Economic System

Answer 4

A system that combines aspects of both capitalism and socialism.
Public and private ownership of industry, market-based allocation with economic planning, and free markets with state interventionism.

Question 5

Command Economic System

Answer 5

Rather than letting market forces dictate the production of goods and services, the government determines priorities and controls production and pricing.

Question 6

Public Vs Private Enterprise

Answer 6

A public company has sold all or a portion of itself to the public while a private company is owned by the company founders, management, or group of private investors.

Question 7

Privatization

Answer 7

The process by which a piece of property or business goes from being owned by the government to being privately owned.

Question 8

Socialism

Answer 8

A political economic system in which property and the means of production are owned in common, typically controlled by the state or government.

Question 9

John Maynard Keynes

Answer 9

Save less and spend more, raising their marginal propensity to consume to effect full employment and economic growth.

Question 10

Marginal Propensity to Consume

Answer 10

A metric that quantifies induced consumption.
The concept is that the increase in personal consumer spending occurs with an increase in disposable income.

Question 11

Roosevelt’s New Deal

Answer 11

FDR’s response to the great depression, advocated for more government intervention in a demand-side kind of way.
Relief, recovery, reform.

Question 12

Demand Side Economics

Answer 12

The theory that the demand for goods and services drives economic activity.

Question 13

Laissez-Faire Capitalism

Answer 13

An economic philosophy of ree-market capitalism that opposes government intervention.

Question 14

Collusion

Answer 14

A non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market’s equilibrium.

Question 15

Characteristics of a Capitalist Economy

Answer 15

The two-class system, private ownership, a profit motive, minimal government intervention, and competition.

Question 16

Characteristics of a Socialist Economy

Answer 16

Features social rather than private ownership of the means of production.

Question 17

Levels of Government Involvement in an Economy

Answer 17

1. Provides the legal and social framework within which the economy operates.
2. Maintains competition in the marketplace.
3. Provides public goods and services.
4. Redistributes income.
5. Takes certain actions to stabilize the economy.

Question 18

Government Subsidies

Answer 18

Financial grants are extended by the government to private institutions or other public entities to stimulate economic activity or promote activities that are in the public good.
Ex. Government buys a portion of the gas so that individual companies can pay the rest.

Question 19

Free Enterprise

Answer 19

Private businesses which operate largely without state control.

Question 20

Income Disparity

Answer 20

How unevenly income is distributed throughout a population.

Question 21

Neo-Conservatism

Answer 21

Endorses free markets and capitalism, favouring supply-side economics, and reduced but not eliminated welfare states.
Believe that free markets do provide material goods in an efficient way, but lack moral guidance.
Return to classical liberalism

Question 22

Stagflation

Answer 22

When money is pumped into the economy during a recession and it does not promote recovery and only results in inflation.

Question 23

Inflation

Answer 23

When spending and incomes rise faster than the production of goods and services, this results in rising prices.

Question 24

Fiscal Policy

Answer 24

Managed by government to improve economic output.