Econ Midterm 1 Flashcards
What does GDP stand for?
Gross Domestic Product.
What does GDP measure?
The market value of all goods and services produced in a country.
What is GDP per capita?
GDP divided by the population (income per person).
What is the formula for disposable income?
What is the formula for disposable income?
Is GDP a perfect measure of well-being? Why or why not?
No, it does not account for inequality, unpaid labor, or environmental factors.
How do you calculate the growth rate of GDP?
(New GDP - Old GDP) / Old GDP × 100%.
Why are ratio scales used in economic graphs?
They help compare growth rates across different countries and time periods.
What major event around 1800 led to rapid economic growth?
The Industrial Revolution.
What are the three key institutions of capitalism?
Private property, markets, and firms.
What is private property?
Ownership of assets like land, buildings, and businesses.
What is a firm?
An organization that produces goods or services for sale.
What other institutions support capitalist economies?
Governments and families.
Why do definitions of capitalism vary?
Because economic systems differ across countries and are influenced by social and political factors.
What are some alternative economic systems to capitalism?
Slavery, feudalism, family-based production, and socialism.
How does capitalism differ between the U.S. and Canada?
The U.S. relies more on markets, while Canada has more government involvement.
