Chapter 2 Flashcards
1
Q
Why is the Us Econ the largest econ?
A
- Population u 320mil
- Working pop of 144mil - produce $116,000 of goods
- Rich population
- Combo of Pop + prod. efficeny
2
Q
What are the primary aspects of the production system?
A
- Inputs / Factors of production- Labor, Machinery, buildings a Natural resources to produce outputs.
- Outputs = Goods + services others want to acquire.
3
Q
Why do many Americans hold grave misconceptions about the US econ?
A
- Because we participate and observe our exp with the econ. E.g. Most goods come from China + Biz costs account for 1/3 of the price we pay at the store.
- Also, US Gov jobs have not grown Over the last decade. (These are misconceptions)
4
Q
Why do the “Working Pop,” not produce much?
A
- On average, in 2013 how much did the avg working American produce?
- $116,000 per worker
- $53,000 per person, workers & non-workers combined
5
Q
How does the econ system get described?
A
- Inputs (Resources) -> Factors of Production (FP) (Refinement & Production) -> Outputs (Goods & Services)
6
Q
Why is India’s econ growth a good reason to study econ?
A
- India’s econ sys is becoming more eff.
7
Q
Why is USE unique?
A
- High per capita income t pop size.
8
Q
What does a “Private-Enterprise Econ” mean in the US?
A
- “Land of opportunity” use of free markets use for VE.
- “Privatized” Industrial assets + other infrastructure are private
- “Marketized” A greater share of GDP flows thru markets, 20% of GDP is Gov, purchases from private enterprise.
9
Q
Gross Domestic Product (GDP)
A
- Measure of the size of the econ, the total amount of it produces in a year.
- Real GDP adjusts this measure (number) for changes in the purchasing power of money. ie, corrects for inflation.
10
Q
What makes an econ Open?
A
- Econ is open if Imports + Exports = large share of GDP
11
Q
An Econ is considered closed if…?
A
Close Economy
- If imports & exports = small share of GDP
12
Q
In 2013 how much of the USE was in ports?
A
- 16% w/ less than 1/5 from China
13
Q
Is USE open or closed?
A
- Most closed among adv. industrial nations. In 2013 14.9%
14
Q
- What is the main theme of this book?
A
- What does the market do well + what does the market do poorly?
15
Q
Why is the USE growing?
A
- Large pop size, Large GDP per capita, 4x higher in 2013 than 1960
- American’s purchasing power increased 9× in 20th century
16
Q
What does Recession mean?
A
- period of time (two quarters?) during which time the econ gets smaller
17
Q
What are the ups -downs of the econ called?
A
- Econ fluctuations or Biz cycle
18
Q
Declining econ periods are called what?
A
- Recession
19
Q
Who is in US Work force (USWF)?
A
- Women increased 23% between 1950 and 2013 into the paid USWF
- This is a major transformation
- less than 4mil teens in WF today
- Theme of this book, how unemployment effects growths recession
20
Q
In 2013 who was the biggest private employer in US?
A
- walmart
21
Q
What are the employment sectors (Non-farm) in 2013?
A
- Service Producing 70.2%, Gov. 16%, Manufacturing 8.8%
- other 4.9%
22
Q
What do all industrialized econs have in common?
A
- Service Economies due to Information age
23
Q
What does the USWF earn?
A
- HS grads only earn 60% of what a collage grad earns.
24
Q
What was the average US hourly compensation avg in 2011?
A
-$35.53 per hour
25
What % of the production process was wages in 2011?
- 60%
26
What is capital?
- The machines and building in the production process
27
What is the actual avg profit % of a price?
- Est. 8% or 3.8% on avg since '86
28
What ratio of earning did Americans spend on Services?
- 2/3 of income greatest portion to housing + healthcare
| - 34% went to goods (2012)
29
70% of GDP is what?
- Consumer spending
30
How are "Outputs" divided up in GDP?
- Consumer spending,
| - Non consumption uses (Gov. spending) & Biz purchases, & Consumer home purchases
31
Who said "the business of America is business"?
- Calvin Coolage
32
How many Biz firms were active in 2011?
- 28.2 mil
33
Between '97 - '07 what % of biz fail?
~ 10%
34
* How do economists link efficiency & competition?
Firms compete within industries -> Increasing efficiency due to competition
35
Are markets physical places or something else?
- Mostly more abstract? like internet
36
What are the main roles of Gov in Market econ?
- 5 main jobs
- Making & enforcing laws
- Regulating business
- Providing certain goods + services e.g. Nat. defense
- Levying taxes for goods + services
- Redistributing income
37
How doe Gov act as a Referee?
- Create laws: State, Fed + local
- Exec branches enforce laws
- Courts arbitrate
38
How does Gov Regulate Biz?
- Antitrust laws protect competition and increase protection agonist Monopoly.
39
What is Gov's most prominent Goal?
- Taxing & spending
- 58% of Fed spending in 2012 went to Soc. Sec., Medicare & Medicaid
- 75% of spending if including Defense + interest payments
40
What was the Tax Burden in US in 2011?
- 24.3%
41
What are Transfer Payments?
- Xfer payments = Gov payments as grants not for GS.
42
Progressive Taxation?
- Taxes increase as income increases
43
Mixed Econ?
- Public influence over markets & mix of public and private ownership.
