Unit 2: economics Flashcards
(56 cards)
Role of government in market economies
The government does not control vita resources, valuable goods, or any other major segments of the economy.
Supply-demand-price relationship
Prices determined by the interaction of supply and demand. When demand is HUGH & supply is LOW, price is HIGH. When demand is LOW & supply is HIGH, price is LOW
what is mercantilism
an economic theory that says the aim of all economic pursuits should be to strengthen the power and wealth of the state
Bullionism
economic health of a nation could be measured by the amount of precious metal (gold & silver ) which it possessed
Competition
Provides consumers with a wide range of choices; business compete to offer better products, lower prices or superior services to attract consumers
Four main economic questions
- What goods and services should be produced?
- How are goods and services to be produced?
- Who will consume the goods and services produced?
- How much should be produced?
Neo-liberalism
both supply side & monetarism reflect a return to the principles of more classical liberalism through laissez-faire policies. Lower income tax rates & lower capital borrowing rates, looser business regulations.
Scarcity
Shortage- quantity demand exceeds the quantity supplied
Surplus
quantity supplied exceeds the quantity demanded
The Industrial Revolution
A revolution in Britain and US that lead to many mechanical developments like steam power and also helped create a more industrialized society
The Invisible hand
Suggests that markets are self-regulation
Laissez-faire
Governments interfere minimally with the free & efficient workings of the market
Bourgeoisie
The capitalist class, owners of the means of productions
proletariat
The working class, those who sell their labour as service
Karl Marx
Was a German political philosopher and revolutionary. Hated the conditions that the Industrial Revolution had brought to workers. With Friedrich Engels, he confounded scientific socialism (modern communism).
The Communist Manifesto
Created by Friedrich Engels with Marx. Outlined many of the core components of modern communists.
Forced collectivization
The Soviet union collected all the agricultural products from the farms. Resistance to said collectivisation led to starvation. an economic policy where all land is taken away from private owners and combined in large, collectively worked farms
Five Year Plans
One major goal of Stalin’s was the rapid industrialisation of the Soviet Union. He initiated a series of comprehensive economic plans known as Five Year Plans. Replacement of NEP
Free market economy
Economy found in the middle of the spectrum, includes government involvement in economic decision making but still maintains a citizens individual freedom
Capitalism
an economic system based on free markets, fair competition, wise consumers, and profit-motivated producers; a minimum of government involvement is favoured
Marxist dialectic
Society evolves through a series of economic stages called Marxist Dialect; 1. Primitive communism 2. Feudalism 3.Capitalism 4. Socialism 5. Communism (Marxism)
Marxism
A radical form of socialism, often called scientific socialism or communism to distinguish it from other socialist ideologies
Reaganomics
The federal economic polices of the Reagan administration, elected in 1981. These policies combined a monetarist fiscal policy, supply-side tax cuts, and domestic budget cutting. Their goal was to reduce the size of the federal government and stimulate economic growth.
Vladimir Lenin
started a communist party in Russia called the Bolshevik party. Introduced War communism and New Economic Policy (NEP) though he described the NEP as a “strategic retreat” as it was based in capitalist ideologies.
