part 3 compatative economics

Question 0

Traditional economics descriptions

Answer 0

• predominantly agriculture
• developing or 3rd world
• trade and barter oriented
• low gdp & pc (per capita =average income)

Question 1

Traditional economics

Answer 1

Economic questions answered by custom

Question 2

Command economy

Answer 2

• economic questions answered by the government
• very little economic choice
• no private ownership
• communism
• old Soviet Union, old communist China, cuba, and North Korea

Question 3

Karl Marx

Answer 3

• 19th century german economist
• author of “communist manifesto” and “das kapital”
• government should control economy and distribute good and services to the people
• founder of revolutionary socialism and commits

Question 4

Communist manifesto

Answer 4

• Karl Marx
• marked reforms in China in the mid 1970’s
• fall of the Berlin Wall in 1989
• collapse of the S.u. 1992
• free market capitalism ( without some mixed economics the only show in town)

Question 5

Free Market (capitalist) economics

Answer 5

• economic questions answered by producers
• limited government
• private property
• wide variety of choices and products
• us and Japan

Question 6

Adams Smith

Answer 6

• 18 century Scottish economist
• published the wealth of nations in 1776
• explained the workings of the free market within capitalist economics
• invisible hand of the market
• laissez faire

Question 7

Laissez-faire

Answer 7

• leave it be
• government stays out of the business practices “hands off” to let the market place determine production, consumption and distribution
• individual freedom and choice are emphasized

Question 8

Capitalism

Answer 8

More business means lower prices and higher quality products for consumers (us!) to buy

Question 9

Principles of capitalism

Answer 9

• voluntary exchange
• private property
• consumer sovereignty
• profit motive

Question 10

Voluntary exchange

Answer 10

Business and consumers must be free to buy or sell what and when they want

Question 11

Private property

Answer 11

Individuals and businesses must be able to get the benefits of owning their own property. Government doesn’t control it

Question 12

Consumer sovereignty

Answer 12

Consumers get to make free choices about what to buys and this helps drive production ( demand drives supply)

Question 13

Profit motive

Answer 13

People want to make Or save money.

Their “self interest” motives capitalism

Question 14

Principles of capitalism

Answer 14

Social safety net: “mixed economy” idea says the government shouldn’t allow people to suffer in economic crisis ( natural part of capitalism business cycle but provide security instead)

Question 15

Mixed economy and socialism

Answer 15

• government and ownership and control of property, of decision making and companies
• government control business
• social “safety net” for people
• socialism
• common in Europe, Latin america and Africa

Question 16

John may hard Keynes

Answer 16

• mixed economy: socialism
• the invisible hand doesn’t always work
• “the long run is a misleading guide to current affairs. In the long run we are all dead or… The trouble is people eat in short run”

Question 17

Keynesian economics

Answer 17

• government should intervene in economic emergencies through tax and spending ( fiscal policy) and changing the money supply (monetary supply)
• this is done to smooth out the business cycle ( expansion and recession) and keep inflation low