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American Ftards > Da Economics My A Hole > Flashcards

Da Economics My A Hole Flashcards

1
Q

Opportunity cost

A

The price plus what you are giving up when buying or not buying something

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2
Q

How do we make the best economic decisions

A

The option with the lowest opportunity cost

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3
Q

Costs

A

The real cost of anything is still its value in alternative uses

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4
Q

What did pencil making illustrate and why

A

Free exchange because it showed how greater good for everybody could be accomplished by buying and selling more

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5
Q

How can both parties be benefited through a transaction

A

Through specialization and trade

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6
Q

What does specialization do?

A

Reduces costs by skill improvement and capital investment

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7
Q

What is economics

A

The study of the use and distribution of scarce resources which have alternative uses

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8
Q

What did Henry Hazlitt say about economy

A

He said that the art of economics is looking at the long term effects of things and how it effects all groups involved

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9
Q

Who talked about long term consequences and effects on the entire population

A

Henry Hazlit

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10
Q

What is the secret to wealth

A

Free exchange! Which is made up of specialization and trade.
Specialization is made up of skill improvement and capital investment

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11
Q

What is capitalism

A

Private ownership of property
Investments determined by the individual (bottom up)
Production and consumption are determined by competition in a free market
Incentive but little equality
A positive regard for self interest

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12
Q

Strengths of the market system

A

Creates an atmosphere of economic freedom
Provides an incentive to produce and create
Promotes the miracle of exchange
Provides for an efficient allocation of resources
Works in harmony with human nature
Establishes a natural control on prices and profits

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13
Q

Capitalism v socialism (antithetical)

A

Capitalism draws power and purpose from private property while socialism considers private property to be a fundamental flaw that must be overcome

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14
Q

Scarcity

A

When everyone’s wants add up to more then is available. Present in all societies and drives the world to economize

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15
Q

Prices

A

Help direct a complex society with direction (Baton)
Communicate news about the availability of a good or service or resource
Affect behavior in use of resource and their products
Allows individuals to adjust the economy to focus on what is relevant to them
Allows resources to flow to their most valuable use
Coordinates the use of resources

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16
Q

Prices as part of a free market

A

Ration goods and allocate resources. Allow the economy to accomplish things that central planning can’t match

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17
Q

What is the law of demand

A

As price goes up the quantity demand goes down

📉

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18
Q

What is the law of supply

A

As price goes up the quantity the supplier produces goes up
📈

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19
Q

What is the equilibrium price

A

The point at which the supply and demand curves cross

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20
Q

Y axis

A

Price

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21
Q

X axis

A

Demand

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22
Q

Adam smith

A

Men work for their own self interests which unintentionally promotes the public interest 

This is brought about by the invisible hand

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23
Q

Max Weber

A

Believed that
Culture/ religion/ society shaped economics and not the other way around

He believed the Protestant ethic drives capitalism

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24
Q

Reality in rebuke of max Weber

A

Actually thrift, work, and delayed gratification drives capitalism
Virtue undergrinds a robust economy

25
Q

Who shifted the economy of the pilgrims from communism to a market based system

A

Governor William Bradford

26
Q

Strategies of bugbuisness / monopolies

A

Horizontal combinations : combing business that produce or provide similar products

Vertical combination: combing all the business activity a single product from the the resources through to its sales

27
Q

Balance of a free market

A

Laissez faire - no government interference

Regulation : governments intervention to correct market weaknesses

28
Q

weakness and how we address them

A

Externalities
Inperfect info
Monopolies
(Gov regulation)

Poverty
Inequality
Instability
(Gov welfare)

Business cycles such as recessions
(Fiscal and monetary policy)

29
Q

Government intervention micro vs macro

A

Micro- define how employees are treated
Restrict products businesses can produce
Regulate exchanges between sellers and buyers

Macro
Stimulate economic growth
Restrain inflation
Mitigate excessive inequality

30
Q

Primary role of a government in a free market equkaity

A

Provide information for exchanges
Prevent coercion or fraud
Define and protect property rights
Resolve contracts and enforce agreements
Provide and guarantee money
Improve the infrastructure and transportation as well as communication

31
Q

Recession

A

Two consecutive quarters of decking GDP

32
Q

Depression

A

A more severe recession that lasts longer. Unemployment rates need to be above 10%

33
Q

Fiscal policy

A

Government taxing and spending
Results in a budget deficit
Congress is the one the administrators it
(Speaker of the house is the pivotal person) (Nancy Palocy)

34
Q

Monetary policy

A

Governments effort to regulate the money supply (done by the federal reserve)

Adjust inflation rates
Buying and selling government securities
Printing currency

35
Q

Why is inflation bad?

A

It destroys all 3 functions of money

  1. Medium of exchange
    A an unstable currency is like no currency
    B people are less likely to accept it for transactions
  2. Unit of account
    Money as information is weaker
    We don’t have good information to make decisions
  3. Store of value
    Many loses value over time (“spoils”)
    Tax on savings basically
    Protestant ethic is punished
36
Q

Inflation favors

A

Those who borrow money
Debtors or those who own real estate

37
Q

Inflation looser

A

The creditors or those that loan out money like a bank
Savers because of the loss of worth
The government wins In times of inflation

38
Q

John Keynes

A

Depression era Brittish economist

Price drop doesn’t always raise demand and it’s up to the government to increase demand through borrowing and spending

39
Q

Legacy or outcomes of the new deal

A

People see the government as responsible for the economy

Also gov is responsible for protection against an economic disaster

Intro to the idea of big “government”

A vastly expanded federal work force

Expansión to labor unions

Expansion to welfare state

Shaped the current political parties

Served capitalism rather then abolishing it

40
Q

Current economic crisis

A

Ben Bernanke put the money in

And now Jerome Powell must remove it

41
Q

Government debt

A

Has gone insanely high
Now is at about 28 trillion dollars

42
Q

Competing values (political parties)

A

Equal opportunity: republicans everyone starts equal

Equal results : everyone ends equal

43
Q

Equal opportunity policy

A

Little inference in the market
Prevent fraud and dishonesty - fair rules
Provide education
Prevent discrimination against specific groups

44
Q

Equal outcomes policies

A

Progressive taxation- tax the rich to give to the poor

A redistribution of wealth - direct payments, transfer payments or entitlements

Much more government involved in the market place

45
Q

Who was Milton friedmon

A

Developed an idea of monetarism

46
Q

How do you increase the money supply

A

You lower the interest rate

47
Q

What is quantitative easing

A

When you increase the money supply

48
Q

What are drawbacks of loose economic policy

A

Bubbles and inflation are two huge drawbacks of loose monetary policy

49
Q

Three operational characteristics of free market

A

Self interest
Competition
Profits

50
Q

Protestant ethic characteristics

A

Thrift
Hard work
Deferred gratification

51
Q

Reasoned America was prosperous

A

Free market
Location/ resources

52
Q

What was the national recovery administration

A

Was a gov organization that aimed to control parts of the economy
Ended up making things worse though

53
Q

Why is Keynesianism so popular

A

Just do it
It fits moderate center
It means lower taxes with greater benefits

54
Q

Keynesian weakness

A

Budget deficit which leads to debt
And increased interest rates

55
Q

Positive effects of high money supply

A

Bank stability
Increased demand for products (more money circulation)

56
Q

Paul vauker

A

Reduced the money supply and Ended the inflation of the 70s and 80s which paved the way for a better 90s

57
Q

Alan greenspan

A

Flooded the market with money after the crash 1987 which helped the nation quickly recover. Z

58
Q

Current fed chair

A

Jerome Powell

American Ftards (2 decks)

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