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Study > DEVS340 midterm > Flashcards

DEVS340 midterm Flashcards

1
Q

liberalism

A
  • free market
  • minimal gov. intervention
  • individual economic freedom
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2
Q

Adam Smith ideas

A
  • Invisible hand
    - the wealth of nations
  • believed in free market
  • believed that humans are naturally self-interested
  • competition makes sure they keep their prices low, quality high + wages fair
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3
Q

What is the invisible hand?

A
  • if everyone acts in self-interest, eventually there is mutual benefit in trade/economic interactions
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4
Q

Modernization theory

A
  • underdev. countries need to mimic what developed countries did to become rich
  • this will eventually lead to them being capitalist
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5
Q

Keynesianism

A
  • gov. is a tool for stabilizing the free market system
    - only as a last resort
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6
Q

Dependency theory

A
  • critiques modernization theory bc it thinks modernization theory ignored the unfair side of economics (exploitation)
  • poor countries are stuck being poor because rich countries keep them that way
  • rich countries want them to stay poor so the current economic system continues to work (cheap labor and products, etc)
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7
Q

Import substitution industrialization (ISI)

A
  • country builds their own industries by reducing reliance on imported goods
  • taxes on imports
  • self-sufficient
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8
Q

neoliberalism

A
  • new (more radical) liberalism
  • free markets
  • privatization
  • reduce public spending
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9
Q

Structural Adjustment Programs (SAPs)

A
  • Manifestation of neoliberalism in dev. programs
  • WB and IMF
  • imposed harsh economic reforms (austerity, privatization) on countries in exchange for loans
  • criticized for being too harsh
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10
Q

Basis of Marxism

A
  • two classes (wealthy and working class - bourgeoisie and proletariates)
  • ruling class exploits working class
  • marxism calls for revolution for no classes, wealth and resources shared
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11
Q

Communist manifesto

A
  • written by Marx and Engels
  • calls for a working class revolution
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12
Q

Hegemony

A
  • when one group or country has dominant power or control over others
  • how those countries gain control
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13
Q

What is a critique of neoliberalism?

A
  • Leads to inequality
  • BC free markets mean businesses can grow and not always benefit everyone
  • rich get richer
  • cuts to public services (hurts low-income people_
  • privatizations make it harder to afford things
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14
Q

What is mercantilism?

A

idea that a nation’s wealth + power were best served by increasing exports + trade

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15
Q

growth imperative

A

economic growth is necessary for stability and prosperity

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16
Q

Comparative advantage

A
  • specialize in products you’re efficient at
  • trade for things you’re less good at
17
Q

Why did Keynesianism start

A
  • response to the great depression (1930s) + socialism
  • thought that capitalism was in crisis
    ◦ wanted to recognize contradictions in the market
18
Q

Multiplier effect

A
  • initial increase in gov. spending can lead to a larger + cumulative increase in overall economic activity
19
Q

welfare state

A
  • social safety nets
  • pensions + retirement benefits
  • family support
  • employment protections
  • income redistribution
    ◦ tax systems
20
Q

universality

A
  • idea that classical econ. theory can be applied across the globe regardless of context
  • Adam smith + keynes
21
Q

monetary policy

A
  • money supply + interest rates
  • using interest rates to compact economic issues like inflation
22
Q

labor market flexibility

A
  • makes it easier for employers to hire + fire workers
  • businesses more likely to expand + hire new workers
  • businesses stay viable in downturns
23
Q

Tragedy of the Commons

A

situation where people overuse a shared resource because they all act in their own self-interest

24
Q

Friedman’s ideas

A
  • free market is a component of individual freedom
  • free markets must be under capitalism
25
Q

Who came up with the modernization theory?

A

Rostow

26
Q

declining terms of trade

A

poor countries export raw materials (cheap + unstable in price) while importing expensive manufactured goods from rich countries

27
Q

What was ISI in response to?

A
  • Dependency theory
  • poor countries should develop their own industries instead of relying on imports from rich countries
28
Q

Historical materialism

A
  • marx
  • argues that the way we produce goods (labor + capital) shapes society + its ideas
29
Q

What does marx think about capitalism?

A
  • inherently contradictory
  • workers paid less than the value of the product
  • surplus is taken by capitalists to stay competitive
  • eventually workers can’t afford to buy the goods they produce

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