Chapter 4 Flashcards
The study of the interaction between states and markets
Political Economy
The interaction between the forces of supply and demand that allocates resources.
Markets
goods and services that are owned by an individual or a group, privately or publicly.
Property Rights
Property is not always tangible (Car, house, phone). Refers to ownership of a specific type of knowledge or content—a song, a piece of software code, or a treatment for diabetes.
Intellectual Property
Goods, provided or secured by the state, available to society, and which no private person or organization can own
Public goods
Education and unemployment or retirement benefits
Public goods examples
State provisions of the public benefits, such as education, health care, and transportation.
Social Expenditure
the state’s provision of public benefits, such as education, health care, and transportation.
Welfare/Welfare State
The state institution controls how much money is flowing through the economy as well as how much it costs to borrow money in that economy.
Central Bank
The rate is charged to private banks when they need to borrow funds from the central bank or one another.
National Interest Rate
An outstripping of supply by demand, results in an increase in the general price level of goods and services and consequent loss of value in a country’s currency.
Inflation
Inflammation of more than 50 percent a month for more than two months in a row.
Hyperinflation
A period of falling prices and values for goods, services, investments, and wages.
Deflation
A rule or an order that sets the boundaries of a given procedure.
Regulation
A single producer that can dominate the market for a good or service without effective competition.
Monopoly
A tax on imported goods
Tariffs
A nontariff barrier that limits the quantity of a good that may be imported into a country.
Quotas
Policies and regulations are used to limit imports through methods other than taxation.
Non-Tariff Regulatory Barriers
The ability of one country to produce a particular good or service more efficiently relative to other countries’ efficiency in making the same good or service.
Comparative Advantage
A political economic system in which national economic power is paramount and the domestic economy is viewed as an instrument that exists primarily to serve the needs of the state.
Mercantilism
A political economic system in which freedom and equality are balanced through the state management of the economy and the provision of social expenditures; a political ideology that advocates such a system.
Social democracy
A political attitude that favors evolutionary transformation; an ideology and political system that favors a limited state role in society and the economy and places a high priority on individual political and economic freedom.
Liberalism
A political system in which all wealth and property are shared to limit exploitation, oppression, and, ultimately, the need for political institutions such as the state; a political ideology that advocates such a system.
Communism
The relationship between political and economic institutions in a particular country and the politics and outcomes they create.
Political Economic system
The principle that the economy should be “allowed to do” what it wishes; is a liberal system of minimal state interference in the economy.
Laissez Faire Economics
The term to describe mercantilist systems.
“State Capitalism”
A political economic system in which national economic power is paramount and the domestic economy is viewed as an instrument that exists primarily to serve the needs of the state.
Mercantilist
A statistical tool that attempts to estimate the buying power of income across different countries by using prices in the United States as a benchmark.
Purchasing Power Parity (PPP)
Gini Index
A statistical formula that measures the amount of inequality in a society; its scale ranges from zero to 100, where zero corresponds to perfect equality and 100 to perfect inequality.
A statistical tool that attempts to evaluate the overall wealth, health, and knowledge of a country’s people.
Human Development Index (HDI)
Developed by the social scientist Richard A. Easterlin the idea that when standards of living rise past a certain level (perhaps $10,000–$15,000 per capita GDP), happiness stagnates.
Easterlin Paradox
