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American History (8A) > Economics/Industrialization Vocab > Flashcards

Economics/Industrialization Vocab Flashcards

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1
Q

If supply is high and demand is low, then the price is……

A

If supply is high and demand is low, then the price is low, on sale.

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2
Q

If supply is low and demand is low, then the price is…….

A

If supply is low and demand is low, then the price is low.

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3
Q

If supply is high and demand is high, the price should be _______ but in reality it is ______________.

A

If supply is high and demand is high, the price should be low but in reality it is high. Theory vs. Practice- We determine how much we are willing to pay.

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4
Q

If supply is low and demand is high, the price is __________.

A

If supply is low and demand is high, the price is high.

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5
Q

In a Free Market economy, _______often determines/drives price.

A

In a Free Market economy, demand often /drives determines price.

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6
Q

What keeps prices honest or reasonable? (In a free market economy)

A

Competition keeps prices honest and reasonable. (Only counts for the price, not credit cards).

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7
Q

What is the Invisible Hand? Who is Adam Smith?

A

The Invisible Hand is one you cannot see coming, but impacts the economy. Adam Smith is a Scottish economist and is “the Father of Capitalism” or the idea of the free market economy in the 1700s. (Influencers/Group Think)

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8
Q

Self-interest

A

A desire to succeed.

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9
Q

Initiative

A

Somebody has an idea and puts it into action.

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10
Q

Competition

A

Has a desire to be the best.

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11
Q

***Unforeseen Events and examples!

A

Unpredictable events that can affect a business. We have lived through the pandemic/covid. Ex, winning the lottery, made fidget spinners popular and then unpopular: teachers said no way.

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12
Q

What the names other than a Free Market Economy?

A

Free Market Economy, Capitalism, and Free Enterprise.

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13
Q

In Free Market Economy, what are the prices based on? What government?

A

The prices are based on supply, demand, and competition. There is almost no government control. The government type is a Democracy- we vote for our leaders.

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14
Q

What economy type does the US have?

A

The US has a Free Market Economy/Capitalism/Free Enterprise.

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15
Q

Laissez-Faire

A

Hands off for the government.

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16
Q

Private Citizens

A

An average person can own a business.

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17
Q

Entrepreneur

A

A risk taker, no guarantee you will make money.

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18
Q

Profit

A

All costs must be paid first and then you get the profit/ the money you actually get.

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19
Q

Gross Profit

A

A company’s revenue (how much it/the company makes in total)

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20
Q

Net Profit

A

A company’s revenue after ALL expenses have been paid.

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21
Q

Protective Tariffs

A

Tax on imported goods meant to protect the workers and helps the US economy. To buy goods from the mother country; the government gets to keep the taxes. BUY AMERICAN!!

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22
Q

Intellectual Property

A

Copyrights, patents, trademarks. (Protected In Constitution)- your original ideas, may financially benefit.

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23
Q

Patents

A

An invention. -(A patent for an invention is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office. Generally, the term of a new patent is 20 year.)

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24
Q

Copyrights

A

Words.

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25
Q

Trademarks

A

Symbols

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26
Q

What are two impacts of interest rates on borrowing money from banks?

A
  1. Speed up an economy.- Lower interest rates and BUY!!- Market is good, helps business workers. (When an economy is struggling encourages others to spend; buy products, build, home improvements, businesses are supposed to take the money and expand)
  2. Slow down an economy.- Increase interest rates to buy less. (When people borrow too much, so people in debt, will not further get in more debt.) People buy less→ corporations have too much product→ lower prices.
    -Debt- if you don’t have insurance you can be in debt, but the government will help them if Socialism and under insurance, you can also be in debt.
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27
Q

Trade Wars

A

Can’t do anything, but raise tariffs.

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28
Q

What are three reasons for Trade Wars?

A
  1. Trade imbalance
  2. Retaliation for stealing of intellectual property- Ex, China 1970s - only works in a Democracy in the US, to go to court, can’t do court with China.
  3. Retaliation for raising tariffs- we raise ours, they raise theirs.
29
Q

Who decides the interest? Who takes your house if you don’t pay for it?

A

Government decides the interest. Interest- what the banks make of it, bank charges interest. If you don’t pay your Mortgage, the bank takes your house.

30
Q

Socialism; what it is and type of government?

A

Similar to the Free Market but the government has control over certain aspects of an economy. It can control production, price, & supply. It is usually thought of as a country that the government controls medical care costs. Ex, Spain, France, Canada. (Higher taxes, includes medical, and don’t have to pay for medical costs. /People can go in debt and paying equal amount to insurance in the US.
Type of government: Democracy*

31
Q

Communism? Examples of countries, why doesn’t Communsim work?

A

(Command economy)- an economic system where the government controls every aspect of the business process. -Good idea, but when in practice doesn’t work and no hands off for the government- drawbacks- military paid first. (Gives too much power to one individual) Ex, Russia, China- mixed because we trade with them, North Korea. - Economic system, not a government.

32
Q

What does communism not encourage and ruin?

A

Communism does not encourage initiative- The American Dream, can’t make up classes. Communism also ruins incentive, “someone is running the show, dictator”.

33
Q

Who created the idea of Communism?

A

Karl Marx and Friedrich Engels- “formation of a classless society”- we are equal, but I’m in charge.

34
Q

Who determines what will be produced in a communist economy? Who determines price? Who makes the profit? What type of government and what does this mean?

A

The government determines what is produced, how much is produced, and the price. The government makes all of the profit and decides how much to give the manager and workers. The type of government is a dictatorship, government and military are the ones that are feed and paid.

35
Q

In a communist economy, how are the workers treated?

A

The workers do not have rights or fair wages. “Less drive to work as hard, if people who get paid the same as you work less hard then you”.

36
Q

Proprietorship. Liability?

A

Privately owned business. For example, a candy store. Has great liability- great risk.

37
Q

Partnership. Liability?

A

Two or more people own a business. For example, a small clothing store in Locust Valley is owned by two or more people. Has a great liability or a great risk.

38
Q

Corporation and examples

A

A business owned by investors who buy shares of stock and has a limited liability. Ex, McDonald’s or Google.

39
Q

How is the corporation’s rights compared to an individual?

A

A corporation has the same rights as an individual. It can sue, but the corporation is sued, not an individual person. A corporation can sue you, but an individual sues a corporation! Good luck!

40
Q

What can corporations do?

A

A corporation can make a great profit, raise more capital (money) for improvements, & can buy out smaller companies.- Consolidation.

41
Q

What can a corporation control and affect?

A

It can control large parts of a market, affect the economy and politics.

42
Q

Limited Liability

A

Risk.

43
Q

Lobbyists and Dirty, can’t be like who? What does this show?

A

Meet in the Lobby with the Congressmen/Senators, work and are paid by a corporation to convince Senators and Congressmen to vote their way or in favor of the company they work for. Can’t be like Fisk and Gould-spread secrets. Dirty, if business owners convince Congressmen to vote in favor of their idea. Not bribery and nothing illegal about it- has been going on forever, Money goes for the Senators and Congressmen’s re-election campaign.
-“Bosses of the Senate”- Corporations can influence politics.

44
Q

Corporations have what kind of government control?

A

Limited government control (laissez-faire)- makes sure products are safe, not a monopoly, etc.

45
Q

Stock? Stocks are like what? Easy to sell?

A

Share piece of a corporation. A brick in a building, the more stocks you own, the more powerful you are. Easy to sell if a person no longer wants it. Some stocks pay dividends if the pirce goes up, but stocks can also go down.

46
Q

Dividend

A

Payment to stockholders from a corporation’s profits.- You don’t always make a profit, stocks go down. (Extra money)

47
Q

Mass Production

A

Many goods produced at one time. (Price goes down)

48
Q

Assembly line

A

Pieces of a product are added until it is completed in a factory. Cars are made in assembly lines, not really expensive cars though.

49
Q

Direct Employment

A

Person gets paid from their employer. Ex, Apple.

50
Q

Indirect Employment

A

Worker benefits from the success of another business. Ex, Apple boxes, UPS- paid by their truck company.

51
Q

Spin-off industries

A

Creation of a good or industry based on a central industry. Ex, sneaker cleaners. Built on another industries success. (Based on other companies, if Apple is doing really well, the phone case companies will do well.)

52
Q

Vertical Integration

A

Ownership of all pieces of production to create a product. (Everything going up) You control all the costs, if you own it- own all aspects from start to finish. Ex, everything it takes to make a cake, flour, sugar, butter, etc.

53
Q

Horizontal Integration

A

Ownership of many similar industries/businesses, in a sector. Not a monopoly, a trust, different price points/capture all price points. Could buy from different places though, (competition).

54
Q

Consolidation and example. Who has to get involved?

A

When larger businesses buy smaller ones. If consolidation ends competition & becomes a monopoly, it would be illegal in a free market economy.
Example: There were concerns when Walgreens wanted to buy Rite Aid because there would basically be two major pharmacies, CVS and Walgreens. They would have too much influence in a sector. In 2017, a compromise was worked out with the government, government has to get involved.

55
Q

Trust. Why not monopoly? Examples!! Always Horizontal Integration?

A

A group of corporations run by a single board of directors. It could end up being a monopoly if there is a lack of competition.
Ex. If many gas companies with different names are run by ONE parent company,
an investigation might occur if there was NO opportunity for competition. If Google, Facebook, and Twitter come together it would be a trust, if they have one board of directors. All trusts are not monopolies. But can be a monopoly if one company controls an entire industry. Isn’t always horziontal integration.

56
Q

Monopoly

A

One company controls an entire industry- ends competition→ illegal in a free market economy/ in the US. However, there are necessary monopolies, such as water companies, electric companies, and internet providers, in the area, you have no choice. The government makes sure prices are reasonable.

57
Q

Pools and examples!!

A

When different companies control prices and act as a monopoly ex. Kelloggs, Cereal companies, gas stations during an emergency.

58
Q

Collusion, example, and why illegal?

A

Is Illegal in a Free Market Economy because even if independent it is acting like a monopoly. Is when the cereal companies come together and raise the prices, all the brands, artificially raised the prices. For example. Kelloggs, there is no wrong in making money, but when you have power you have to use it for the good of the whole.

59
Q

Price Gouging

A

Is Illegal in the US and is where companies take advantage of negative/emergency situations to make price profits. (Need it and you can’t raise necessities) Ex, Clorox got away with price gouging in Covid and argued short-term vs, no supply and high demand.

60
Q

Rebates, when a problem, force out businesses, examples.

A

Discounts are given on services or merchandise. It’s only a problem if it forces out the competition.
–Certain corporations purposely charge less to another corporation to help them force out smaller businesses.- Harder for one company to stay in business. Everyone has the same ability.
–For example, a railroad that carries oil across the country charges less to a major oil company than a smaller oil company to carry the oil so that the smaller oil company is forced out of business. This could be investigated.
—ALL BUSINESSES MUST HAVE THE ABILITY TO GET THESE DISCOUNTS.

61
Q

The Business Cycle- Prosperity??

A

Prosperity- (Boom)- High employment, expanding businesses, high wages, people spend, optimistic outlook

62
Q

Philanthropy

A

People give their money away.

63
Q

Change in a business cycle reasons:

A

There could many reasons such as drought, war, strike, politics, banking problems, pandemic.

64
Q

***Recession

A

Inflation→ prices increase while wages do not (stay the same).

65
Q

Depression and what is it impacted by?

A

(Bust) -High unemployment, failing businesses, job loss, pessimistic outlook. A healthy economy has 5% unemployment. Impacted by Demand, War, Drought, Perception; If people think the economy is good, they buy buy buy!, Politcs, Tariffs, and the Invisible Hand.

66
Q

Recovery

A

Rebuilding the economy→ creating jobs, decrease imports, high protective tariffs, decrease the interest rate for mortgages, etc. Lower interest rates, so people buy buy buy! Less goods, price goes up.

67
Q

Example of a business that affects the economy.

A

Walmart is the top employer and has a massive impact on the economy- Walmart has the power, Presidents would meet the Walmart owners.

68
Q

How are the workers treated in a Free Market Economy?

A

Workers have rights and fair wages!

69
Q

All trusts are not..

A

Monopolies!!

American History (8A) (3 decks)

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