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×Government and Economics > American Economic System > Flashcards

American Economic System Flashcards

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1
Q

command economy

A

economic system wherein the government makes all economic decisions

commonly associated with communist countries

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2
Q

characteristics of command economy

A

means of production controlled by government

prices set by government

job security ensured by government

less freedom for individuals

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3
Q

problems with command economy

A

less incentive

quality problems

less choice for consumers

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4
Q

market economy

capitalism

free-enterprise system

A

economic system wherein individual consumers and producers make basic economic decisions based upon principles of supply and demand

commonly associated with democracy

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5
Q

characteristics of market economy

A

private property is essential

entrepreneurs are encouraged

capital is necessary

dependent on competition

means of production is controlled by individuals

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6
Q

globalization

A

growing integration of national economies that is leading to a more interdependent global economy

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7
Q

causes of globalization

A

human nature drives people to want to work together

improved technology

end of Cold War

policy changes by governments

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8
Q

costs of globalization

A

corporatization

offshoring

outsourcing

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9
Q

offshoring

A

pulling people from other places to do jobs in a country

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10
Q

outsourcing

A

moving jobs to people of another country to do it in their country

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11
Q

macroeconomics

A

study of economics that is concerned with economics as a whole with basic subdivisions

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12
Q

microeconomics

A

study of economics that is concerned with specific economic units and detailed consideration of the behavior of these units

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13
Q

standard of living

A

measurement of how effective an economy meets needs by looking at purchasing power and quality of life (based on leisure time)

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14
Q

full employment

A

maximum number of those willing to work in suitable jobs

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15
Q

inflation

A

general rise in price of goods and services

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16
Q

determination of needs

A

comparison of countries

comparison of classes

needs change over time

17
Q

production possibilities curve

A

shows possible combinations of 2 types of goods that can be produced when available resources are employed fully and efficiently

18
Q

efficiency

A

production of maximum possible output from available resources

19
Q

opportunity cost

A

value of best alternative that must be passed up

20
Q

measurement of opportunity cost

A

dollars

personal choice based on preference

21
Q

problems with opportunity cost

A

humans defy logic

humans can make decisions based on incorrect or misleading information

22
Q

variance of opportunity cost

A

based on person

based on options

23
Q

sunk cost

A

expense that has already been incurred and cannot be recovered

24
Q

demand

A

amount of goods or services that consumers are willing and able to buy at specific prices

25
Q

law of demand

A

states that the proportion of price and demand is inverse

26
Q

factors which influence demand

A

tastes and preferences of consumers

number of consumers

income of consumers

price of related goods

consumer expectations for future price and income

27
Q

supply

A

amount of goods or services that producers are willing and able to sell at specific prices

28
Q

law of supply

A

states that the proportion of price and supply is direct

29
Q

factors which influence supply

A

number of sellers

advancement of technology

change in resource prices

change in expectations for future prices

change taxes or subsidies

change in prices of other goods

30
Q

equilibrium of supply and demand

A

point of price and quantity at which supply and demand are in balance

31
Q

importance of equilibrium of supply and demand

A

no resources are wasted at equilibrium of supply and demand

32
Q

location of shortage on graph of supply and demand

A
33
Q

location of surplus on graph of supply and demand

A
34
Q

gross domestic product (GDP)

A

measurement of amount of goods and services that an economy produces within a year

35
Q

John Maynard Keynes

A

provided basis of fiscal policy

36
Q

Jerome Powell

A

current chairman of Federal Reserve System

37
Q

Adam Smith

A

author of The Wealth of Nations

ideas gave basis of capitalism

38
Q

Karl Marx

A

author of Das Kapital

focused on role of worker in economy

ideas gave basis of communism

×Government and Economics (9 decks)

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