10 final Flashcards
government
an established system of political administration by which a nation, state, society or organization is ruled
socialism
any economic system based upon collective ownership and control of many or most natural resources
bureaucracy
a large, complex organization composed of appointed officials and numerous agencies and departments
keynesianism
economic philosophy based on the belief that a society’s economic problems can be better solved by “expert planners” than by the natural corrections of a free market
governments have become involved in economic matters during the past four centuries by
- controlling the supply of money
-taxing imported goods - regulating markets
- granting monopolies to organizations and individuals
governments’ potential danger to economies
- excessive taxation
- inflation and debasement of money
- excessive public expenditure
- excessive regulation and direction of the economy
- political plundering of the economy
excessive taxation
it can lead to not enough money for capital goods or investments, which leads to production of goods and services diminishing, which leads to the government trying to help by lowering prices of goods which leads to the government having to further increase taxes which spirals toward national bankruptcy
inflation and debasement of money
when a government, under the sponsorship of a central bank, adds too much to the money supply, prices rise rapidly, investments are discouraged, interest rates increase, and most people suffer economically
excessive public expenditure
when much of a nation’s wealth is consumed by excessive expenditures, producers tend to lack capital, forcing consumers to survive on fewer goods
political plundering of the economy
leads to low productivity and poverty is taken for granted
the government of every country that wished to have a productive economy has to be concerned with
macroeconomies
has much to do with the success or failure of any economy
governmental policies
peacekeeping by a governments leads to_______
political authority has ______ _______
prosperity; opposite effect
new deal
federal program implemented by Franklin Roosevelt during the Great Depression to relieve money of the gold standard and attempt to provide economic stability
John Maynard Keynes
Lived: 1833-1946
Major Publications: The General Theory of Employment, Interest, and Money
Contributions: He was a governmental advisor, treasury official, and negotiator following both World Wars. According to Keynes. it is the government’s responsibility during times of recession to “prime the economic pump,” even if it means running up massive budget deficits and national debt.
