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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
Who shifted the economy of the pilgrims from communism to a market based system
Governor William Bradford
26
Strategies of bugbuisness / monopolies
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
Balance of a free market
Laissez faire - no government interference Regulation : governments intervention to correct market weaknesses
28
weakness and how we address them
Externalities Inperfect info Monopolies (Gov regulation) Poverty Inequality Instability (Gov welfare) Business cycles such as recessions (Fiscal and monetary policy)
29
Government intervention micro vs macro
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
Primary role of a government in a free market equkaity
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
Recession
Two consecutive quarters of decking GDP
32
Depression
A more severe recession that lasts longer. Unemployment rates need to be above 10%
33
Fiscal policy
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
Monetary policy
Governments effort to regulate the money supply (done by the federal reserve) Adjust inflation rates Buying and selling government securities Printing currency
35
Why is inflation bad?
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
Inflation favors
Those who borrow money Debtors or those who own real estate
37
Inflation looser
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
John Keynes
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
Legacy or outcomes of the new deal
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
Current economic crisis
Ben Bernanke put the money in And now Jerome Powell must remove it
41
Government debt
Has gone insanely high Now is at about 28 trillion dollars
42
Competing values (political parties)
Equal opportunity: republicans everyone starts equal Equal results : everyone ends equal
43
Equal opportunity policy
Little inference in the market Prevent fraud and dishonesty - fair rules Provide education Prevent discrimination against specific groups
44
Equal outcomes policies
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
Who was Milton friedmon
Developed an idea of monetarism
46
How do you increase the money supply
You lower the interest rate
47
What is quantitative easing
When you increase the money supply
48
What are drawbacks of loose economic policy
Bubbles and inflation are two huge drawbacks of loose monetary policy
49
Three operational characteristics of free market
Self interest Competition Profits
50
Protestant ethic characteristics
Thrift Hard work Deferred gratification
51
Reasoned America was prosperous
Free market Location/ resources
52
What was the national recovery administration
Was a gov organization that aimed to control parts of the economy Ended up making things worse though
53
Why is Keynesianism so popular
Just do it It fits moderate center It means lower taxes with greater benefits
54
Keynesian weakness
Budget deficit which leads to debt And increased interest rates
55
Positive effects of high money supply
Bank stability Increased demand for products (more money circulation)
56
Paul vauker
Reduced the money supply and Ended the inflation of the 70s and 80s which paved the way for a better 90s
57
Alan greenspan
Flooded the market with money after the crash 1987 which helped the nation quickly recover. Z
58
Current fed chair
Jerome Powell

American Ftards (2 decks)

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