Economics Social 30-1 Flashcards
Social studies 30-1
What are the phases of the business cycle?
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Boom: High employment, spending, and inflation.
Recession: Declining demand, layoffs, reduced production.
Depression: Severe recession (e.g., 1930s).
Recovery: Rising demand, falling unemployment.
Define “free market.”
A theoretical economy where businesses/consumers make decisions (e.g., prices set by supply and demand). Example: Pre-1930s USA.
What is a regulated market?
Government influences the economy (e.g., environmental laws, minimum wage). Example: Modern mixed economies like Canada.
What is a resource-based economy?
Relies on extracting natural resources (e.g., Alberta’s oil, Saudi Arabia’s oil).
Who was Adam Smith?
Classical liberal economist; wrote Wealth of Nations (1776). Advocated laissez-faire (“invisible hand”).
Define “centrally planned economy.”
Government controls all economic decisions (e.g., USSR, North Korea). No private property or competition.
Describe Milton Friedman’s economic views.
Neo-conservative economist; supported monetarism (control money supply) and supply-side economics (Reaganomics).
What did Keynes advocate?
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What did Keynes advocate?
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How does a supply and demand economy work?
Prices/production set by market forces (e.g., smartphone prices based on consumer demand).
What did Adam Smith propose?
Free trade, competition, minimal government. Opposed mercantilism.
Example of a laissez-faire economy?
Herbert Hoover’s presidency (pre-New Deal). Minimal government intervention.
What is supply-side economics?
Tax cuts for businesses to spur growth (“trickle-down”). Example: Reaganomics in the 1980s.
When was laissez-faire prominent?
Industrial Revolution (Britain) and Hoover’s presidency. Shifted post-Great Depression.
Define a liberal-minded person.
Advocates mixed economy (balance of market freedom + government intervention). Example: Keynes’ focus on social safety nets.
What causes inflation?
Demand-pull: High spending.
Cost-push: Rising production costs.
Monetary: Excess money supply.
How do interest rates affect the economy?
Central banks raise rates to curb inflation (e.g., Federal Reserve). Lower rates encourage borrowing.
What is deficit spending?
Government spends more than it earns (e.g., New Deal). Borrows funds, risks higher taxes later.
How much does government intervene in democratic socialism?
Mixed economy: Public services (healthcare) + regulations (anti-trust laws). Example: Canada.
Key policies of supply-side economics?
Tax cuts for businesses.
Deregulation.
Job creation incentives.
Who is a magnate?
Industry leader with significant control (e.g., John D. Rockefeller in oil).
What is a monopoly?
Single company dominates an industry (e.g., Standard Oil in 1800s). Solved by anti-trust laws.
Compare Keynes, Smith, and Marx.
Keynes: Government intervention.
Smith: Free markets.
Marx: Communism (worker-owned production).
. Neo-Conservative Economist
Supports free markets but advocates government role in social order (e.g., Milton Friedman).
What drives a market-oriented economy?
Supply and demand (e.g., USA’s tech industry).
