Chapter 6 Terms Flashcards
When a nation sold more goods to other nations than it purchased from them, it had more gold coming in than flowing out
Favorable balance of trade
The true path to national enrichment; means to “let alone”
Laissez faire
Private individuals own the factors of production and make almost all significant economic decisions
Capitalism
When a central authority, committee, or the people in common own the factors of production and make nearly all significant economic decisions
Socialism
Capitalism in its most extreme form and exists only as an economic theory
Radical capitalism
The form of capitalism that accepts the existence of government but allows it only minimal ownership of resources and decision-making power to perform its responsibilities
Classic liberal capitalism
Goods and services that benefit all or nearly all of a nation’s people and that private firms or individuals would not choose to produce because they could not do so profitably
Public goods
Private citizens own the vast majority of natural resources, financial capital, and labor, but the government freely intervenes in the decision-making process to carry out its economic and social goals
State capitalism
Taxes are very high (generally averaging over 50 percent), and funds are redistributed in such a way that the government claims to care for its citizens from “the cradle to the grave”
Welfare state
A transitional economic system bridging the gap between capitalism and socialism
Social democracy
When a nation’s government assumes ownership of companies on such a large scale
Nationalization
When governments decide to sell their nationalized businesses back to private stockholders
Privatization
Maintains that the national government should be both the central owner and the decision maker in all economic affairs of the state
Centralized socialism
Marx argued that any arrangement of the tools of production short of total state ownership would be counterproductive
Communist Manifesto
Socialism in its most extreme form
Communism
