Chapter 4 Review Flashcards
The study of the interaction between states and markets
political economy
The interaction between the forces of supply and demand that allocates resources
market
Goods or services that are owned by an individual or group, privately or publicly
property
Goods, provided or secured by the state, available to society and which no private person or organization can own
public goods
State provision of public benefits, such as education, health care, and transportation
social expenditures
The total market value of all goods and services produced by a country over a period of one year
gross domestic product (GDP)
The state institution that controls how much money is flowing through the economy, as well as how much it costs to borrow money in that economy
central bank
An outstripping of supply by demand, resulting in an increase in the general price level of goods and services and the resulting loss of value in a country’s currency
inflation
Inflation 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 order that sets the boundaries of a given procedure
regulation
A single producer that is able to dominate the market for a good or service without effective competition
monopoly
A tax on imported goods
tariff
A nontariff barrier that limits the quantity of a good that may be imported into a country
quota
Policies and regulations used to limit imports through methods other than taxation
nontariff regulatory barriers
The ability of one country to produce a particular good or service more efficiently relative to other countries’ efficiency in producing the same good or service
comparative advantage
The relationship between political and economic institutions in a particular country and the policies and outcomes they create
political-economic system
The principle that the economy should be ““allowed to do”” what it wishes; a liberal system of minimal state interference in the economy
laissez-faire
A system of production based on private property and free markets
capitalism
A system of social democratic policy making in which a limited number of organizations representing business and labor work with the state to set economic policy
neocorporatism
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
Industry partially owned by the state
parastatal
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)
A statistical formula that measures the amount of inequality in a society; its scale ranges from 0 to 100, where 0 corresponds to perfect equality and 100 to perfect inequality
Gini index
