Economic Dimensions Flashcards
Free Market Economic System
When there is voluntary exchange by citizens without government intervention. Citizens control the supply and demand of an economy. There would be no taxes, social programs, financial support, etc.
Mixed Economic System
This could look like many different things, but it basically means that the economy is a mix between a free market and a command market.
Command Economic System
When everything in the economy is controlled by the government. The government plans and organizes the economy to maximise social welfare (aid of individuals and families who require it).
Private Enterprise
A business or industry that is managed by the a independent company or individual rather than the state. Ex. Most businesses you think of are privately owned, retail, developers, leisure, legal services, etc.
Public Enterprise
A business or industry that is managed by the state rather than a private company or individual. Ex. Utilities (gas, electricity, etc.), certain forms of transportation, telecommunications.
Socialism
A left-wing political theory that primarily stands for sharing and collective ownership of property and production.
John Maynard Keynes
An economist during times of crisis including the Great Depression who’s theories and ideas changed the world.
Keynesian Economics
A system of economy developed by John Keynes that advocated for government intervention in the economy. When the economy is good (boom) raise interest and taxes and decrease government spending; when the economy is bad (bust) decrease interest rates and taxes and increase government spending.
Franklin D. Roosevelt
Roosevelt was the president of the United States during the Great Depression, and he came up with the New Deal to help his country recover from the crisis.
New Deal
The New Deal was a series of programs that helped the United States recover from the Great Depression. It included creating jobs for people, passing laws, controlling banks, and much more.
Demand-Side Economics
The idea that demand drives the economy, so during a recession, governments should support consumers.
Supply-Side Economics
The idea that supply drives the economy, so during a recession, governments should support businesses and corporations.
Trickle Down Theory
If you help the people at the top of the chain (businesses and corporations), the help with trickle down like a waterfall to help people at the bottom of the chain (individuals and consumers).
Ronald Reagan Economics
Ronald Reagan was the president of the United States in 1981, and he believed in a lack of government intervention in the economy. This would mean more of a classical liberalist approach, and the opposite of keynesian economics.
Margaret Thatcher Economics
Margaret Thatcher was the Prime Minister of Britain from 1979-1990. She did not believe in government intervention in the economy, and she had very strict policies on concepts like privatisation and unions.
Laissez-Faire Capitalism
The idea of a free market economy. A free market economy suggests that supply and demand even out if people act in their own self-interest. This is the opposite of government intervention in the economy.
Self-Interest
Individuals acting and making decisions that benefit themselves.
Self-Reliance
The ability that an individual needs to meet their own social, financial, and essential needs.
Collusion
When people or companies work together to alter the prices of goods and services to benefit themselves.
Right-Wing/Left-Wing Spectrum
A political spectrum that places different ideologies on a line based on how conservative or liberal they are. This spectrum can also be converted to economics.
Capitalist Economy
An economic system where private individuals or businesses own goods (not owned by the state or government), and the economy is controlled by supply and demand in a laissez-faire style.
Socialist Economy
An economic system where all goods and services are publicly owned by the state, community or collective. Goods are distributed to citizens, and there is more government intervention in the economy.
Government Subsidies
Financial aid from the government.
Individualism
Valuing the freedom and security of individuals and their actions over the collective or state.
Collectivism
Valuing the freedom and security of the collective or state over the individual and their actions.
Market Economy
An economic system where prices, interest, etc. are controlled by supply and demand. This would be a laissez-faire or free market system.
Planned Economy
An economic system where prices, interest rates, etc. are controlled and planned usually by the government.
Free Enterprise
Free enterprise is another term for free market. It is an economic system that is driven by supply and demand.
Income Disparity
Different levels or distribution of money.
Neo-Conservative
One of the traditional ways that conservatism was supported as a reaction to classical liberalism.
Social Welfare Programs
Services and programs provided by the government to help individuals or collectives if they need assistance (financially)
Welfare State
A state where the government makes it their priority and responsibility to provide assistance to individuals and collectives.
Business Cycle
A series of events that includes economic contraction and expansion.
Antitrust Laws
Laws created that regulate businesses and create competition to drive the economy.
Aggregate Demand
The total demand for goods and services within a market.
Monetary Policies
Control of the amount of money in the economy.
Fiscal Policies
Use of government spending and taxes to influence the economy.
Prosperity
Being very successful (usually in terms of money)
Market Forces
The factors that affect a certain market. These factors could affect the cost, demand, or availability of an item.
Utopian Socialism
A way to improve capitalism that changes working conditions and education, but maintains the structure of society, the government, and the economy.
Marxism
This would be similar to modern day communism, and it is also known as scientific socialism.
Democratic Socialism
Having a socialist economy (no privatisation, collectivism) along side a democratic government
Egalitarianism
An idea that all people are equal and deserve equality.
Industrial Revolution
1760-1840
A time period when the economy was no longer dependant on agriculture, and it began to revolve around industry.
Reform
Make change in order to improve.
Unionism
The policies that protect unions
Roaring 20’s/The Great Depression
1929-1939
A world-wide economic depression that began with a stock market crash and ended when world war two began.
Regulation
In economics, regulation is government intervention and control.
De-Regulation
Reduction or elimination of of government intervention and control. De-regulation occurs to create more competition in a market
Taxation (progression/flat)
The amount that individuals are being taxed. Progressive taxation would be taxing certain people more. Flat taxation would be taxing everyone the same.
Social Safety Net
Any program that is benefiting individuals or groups.
Recession
a decline or contraction in the economy and the business cycle.
Depression
An extreme recession in the economy.
Inflation
Price increases over a period of time.
Deficit
When exports are greater than imports and expenses are greater than income.
Debt
When people owe others.
Nationalization
The opposite of privatisation. The transfer ownership over an industry from private to state or public control.
Friedrich Hayek
A man who believed in free-market capitalism. He came up with the theory about prices and information.
Milton Friedman
He is considered the founder of monetarism (controlling the amount of money in the economy)
Collective Bargaining
When unions or groups of workers negotiate for different working conditions or wages.
