Econimcs Unit Final Flashcards
what is Adam Smith known for
father/founder of capitalism
what does laissez faire mean
beleif that the govrnment should keep their hands out of buisiness
whats a monopoly
exclusive control of markey supply usually within a componany
oligopoly
when a small number of businesses or companies control a very large share of the market
what are the 4 features of a market economy
supplyand demand, incentive, competition, private ownership
what are the 4 stages of the business cycle
prosperity, recession, depression, recovery
what are the types of businesses in market economys
corporations, private business, partnerships, franchises
what are corporations
when a large number of people are working together
whats a private business
small buisness where the individual owner is totally responsible
whats a partnership
formed through agreements between 2 or more people
franchises
sell the right to use their name and ideas
mercantilism and who is it controlled by
the aim of economic pursuits should be to strengthen the power and wealth of the state; government controlled
what did enclosure acts do
common land became the private property of an individual
5 economic principles of classic liberalism
economic freedom, individual freedom, private property, self-interest, competition
egalitarianism
all people should be treated as equals and have the same political, civil, economic and social rights under the law
equality of oppurtunity
minimum wage, no discrimination in policies, practices or when hiring employes within the workplace
equitable distribution of income
equal wages for work of similar values; people with larger incomes pay high taxes
command economy
high degree of government involvement in the economy
mixed economy
government control of major means of production
free enterprise economy
low degree of government intervention in the economy
equivelent names to command economy
planned, central
equivelant names to free enterprise economy
free economy, market economy
3 basic economic questions
what goods should be produced, how should goods be produced, who should the goods be produced for
whats capital
money used to generate income
whats labour
effort people make to produce the goods or services
whats land
natural resources that are used to produce goodsw
hats scarcity
limited resources and limited wants that results in an increase in price
whats the fiscal policy during recessions and depressions
reduce taxes and increase government spending
whats the monetary policy during recessionsa nd depressions
lower interest rates
whats the fiscal policy during prosperity and recovery
increase taxes and decrease government spending
whats the monetary policy in prosperity and recover
increase interest rates
what is adam smiths theory of the business cycle
the government should do nothing and the market will naturally reajust through its self regulating mechanisms
whats john maynard keynes theory on the buisness cycle
the economy moves in peaks and valleys so the government should help to level these out in order to create a smooth economy
whats profit motive
the desire for profit that motivates one to engage in business ventures
consumer sovereignty
power of consumers to determine what goods and services are produced
invisible hand theory
in a competitive buisness enviornment, everyone will pursue their own self interest
whos john maynard keynes
economosit who supported the idea that governments should be more involved in the economy
whats a welfare state
when the state plays a key role in the protection and promotion of the economic and social well-being of its citizens
whats deficit
the gap between wheat the government spends and what the government takes in
whos the father of utopion socialists
robert owen
what are the problems of a mixed economy
high taxes, hard decisions, large beuracricies
budget surplus
revenue exceeds cost
budget deficite
cost exceed revenues
tariffs
tax placed on imports
subsidies`
incentives to encourage the private industry to set up a company
progressive tax
tax rate whereby the rich are taxed more heavily then the poor
flat tax
tax rate where the rich pay the same amount as the poor
nationalized
when the government takes over a buisness
crown corporation
buisnesses that are run and operated by the government
who was FDR
first american president that began to experient with government involvement where government money would be used to stimulate the eocnomy
whats the new deal
FDRs economic plan to stimulat economic growth during the great depression
trade barriers
enacted by governments to protect hteir nations economy
corporate executives
term given to the bosses or most powerful decision makers in a company
production technology
when workers are replaced by machines to be more productive
